Analysts Expect 2025 to Be Bullish for Gold
The gold ( XAU/USD ) price rose by 0.57% on Tuesday and continued to rally strongly during the Asian and early European trading sessions earlier today.
A weaker US dollar (USD), escalating trade tension, and concerns over global economic growth fuel safe-haven demand for gold.
A fiery trade war between the US and China is igniting, with tensions rising. Nvidia (NASDAQ: NVDA ), a major technology company, said yesterday it would take $5.5 billion in charges after the US government limited exports of its H20 artificial intelligence chip to China. Meanwhile, China ordered its airlines not to take any further deliveries of Boeing (NYSE: BA ) jets in response to the US imposing 145% tariffs on Chinese goods.
"Gold will continue to be strong as long as there’s uncertainty", said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.
Traditionally considered a safe-haven asset during geopolitical and economic uncertainties, gold has hit multiple record highs this year, gaining more than 25% since the beginning of 2025.
"We believe risk-off purchases for gold are yet to pick up", analysts at ANZ said.
They also raised the bank’s year-end gold price forecast towards $3,600 and the six-month forecast towards $3,500. Goldman Sachs, a major US investment bank, has also raised its 2025 forecast towards $3,700 amid soaring demand. According to Reuters, financial markets expect the Federal Reserve (Fed) to resume cutting interest rates in June, after a pause in January, and reducing its policy rate by 100 basis points this year. The weak US dollar exerts additional bullish pressure on XAU/USD, making gold more affordable for holders of other currencies.
Today, investors await comments from Fed Chair Jerome Powell in his speech at 5:30 p.m. UTC for more clues on the interest rate path. In addition, the US Retail Sales report at 12:30 p.m. UTC may add more volatility to all USD pairs.
"Spot gold may climb into a range of $3,304 to $3,323 per ounce", said Reuters analyst Wang Tao.
Euro Lacks Clear Trend Direction
The euro ( EUR/USD ) lost 0.6% against the US dollar (USD) on Tuesday but recovered all losses during today’s Asian and early European trading session. The euro strengthened as the greenback weakened amid escalating trade tensions between the US and China.
Bloomberg News reported on Tuesday that China has ordered its airlines not to take further deliveries of Boeing jets after the US imposed 145% tariffs on Chinese goods. Meanwhile, US President Donald Trump said he was considering modifying the 25% tariffs imposed on foreign auto and auto parts imports from Mexico, Canada, and other countries. Overall, the current tariff situation is highly uncertain, so investors remain cautious and continue to sell the greenback, favouring other safe-haven currencies like the Swiss Franc (CHF) and the Japanese yen (JPY). As a result, the euro is gaining strength due to the US dollar’s weakness.
As for the eurozone itself, the economic outlook remains rather bleak. Yesterday’s German ZEW Economic Sentiment Index plummeted to the lowest level in nearly two years. The drop reflected growing concerns over economic uncertainty, escalating global trade tensions between the US and China, and persistent fears of a slowdown of the eurozone economy. Thus, the recent EUR/USD rally rests on the loss of confidence in the US dollar rather than on the rise of confidence in the euro. Therefore, traders should be very careful when opening long positions in EUR/USD, expecting its further rise.
Today, investors will focus on US Retail Sales reports at 12:30 p.m. UTC and Federal Reserve (Fed) Chair Jerome Powell’s speech at 5:30 p.m. UTC. According to Reuters, retail sales in March likely surged by 1.3%, largely because consumers rushed to buy goods before tariffs took effect. As for Powell’s speech, traders are speculating whether he will adopt the unexpectedly dovish stance recently or maintain a more neutral, balanced approach. Key levels to watch are resistance at 1.14230 and support at 1.13000.
Australian Dollar Benefits From Weakening US Dollar
The Australian dollar ( AUD/USD ) gained 0.27% against the US dollar (USD) on Tuesday. AUD continued to move higher during today’s Asian and early European trading sessions as the US Dollar Index (DXY) failed to find support in the 99.700 area and resumed its decline.
The brewing trade war between the US and China is considered to be a major bearish factor for AUD/USD. Still, strong capital outflows from the greenback towards alternative safe-haven currencies like the Swiss Franc (CHF) and the Japanese yen (JPY) have been supporting the Australian dollar lately. In addition, the latest macroeconomic data from China, a major export market for Australia, were surprisingly higher than expected, improving the prospects for the Australian economy. China’s industrial output in March rose by 7.7% from a year earlier, quickening from 5.9% growth in January and February. Also, the gross domestic product ( GDP ) grew 5.4% in January–March, exceeding analysts’ expectations for a 5.1% rise. However, most economists consider these improvements only temporary, as rising tariffs are expected to slow the Chinese economy considerably.
Today, traders should focus on the unfolding trade tariff tensions and monitor any developments related to possible trade negotiations. Today’s main event is the speech of the Federal Reserve (Fed) Chairman Jerome Powell at 5:00 p.m. UTC. If he gives dovish signals and confirms that the US central bank is prepared to cut the rates more aggressively, AUD/USD will likely continue to rise. If Powell gives a more balanced outlook and sounds less dovish than the market expects, AUD/USD may fall. In addition, the US Retail Sales report at 12:30 p.m. may add more volatility to all USD pairs. On top of that, the Australian Employment report will come out at 1:30 a.m. UTC tomorrow and may shake all AUD pairs. The market expects to see 40,000 new jobs added in March. Lower-than-expected figures will likely drive AUD/USD below 0.63120, possibly below the critical 0.62800 level. Higher-than-expected results may pull AUD/USD above 0.63800.