Gold eyes $3,000 as safe-haven demand remains robust

Gold has resumed its steady climb as investors increasingly seek refuge amid persistent geopolitical uncertainty. Despite last Friday’s setback, XAU/USD is on course once again toward the $3,000 milestone. This morning, the precious metal surged past a key resistance level at $2,945, signalling renewed bullish momentum.

Geopolitical Dynamics and Market Sentiment

Recent developments have contributed to a cautious return of risk appetite in global markets. Early attempts at peace talks in Eastern Europe have rekindled optimism, with the United States playing a crucial role in fast-tracking negotiations to resolve the prolonged conflict between Russia and Ukraine. Initial concerns that the US might exclude Europe and Ukraine from discussions were allayed after a meeting in Riyadh, where it was confirmed that European participation would be integrated at a later stage.

Despite these positive signals, gold's upward trend was briefly interrupted last week as broader market sentiment improved. However, ongoing uncertainty—exacerbated by unpredictable political figures and intermittent trade policy announcements—continues to bolster demand for safe-haven assets. For instance, recent tariff announcements by Donald Trump, including a 25% tariff on auto imports and similar measures on semiconductors and pharmaceuticals, have added to the market’s cautious tone.

Central Banks and the Shifting Reserve Landscape

Globally, central banks are expanding their gold reserves in response to an unsustainable debt structure in the US and rising concerns over the US dollar's dominance as the global reserve currency. Led by China, many nations are offloading US treasuries in favour of alternative assets. Additionally, China’s efforts to back its own gold pricing system linked to the yuan further reinforce the role of gold as a stable store of value. This trend suggests that, even if geopolitical tensions ease, the long-term outlook for gold remains decidedly bullish.

Technical Outlook on XAU/USD

From a technical perspective, the bullish outlook for XAU/USD persists despite potential challenges as the price nears the psychological $3,000 threshold. Last week’s correction restored the Relative Strength Index (RSI) to a neutral zone, yet the renewed momentum this week has already nudged it back into overbought territory.

Looking ahead, the market could see incremental gains as traders test the $3,000 level. At this juncture, the price action may either continue its upward trajectory, supported by strong fundamentals, or experience a corrective pullback as profit-taking occurs. Should a pullback materialize, new buying opportunities could emerge, reasserting the underlying bullish sentiment.

XAU/USD daily chart

Past performance is not a reliable indicator of future results.