Gold Price Forecast: XAU/USD Drops to $5,121 as Dollar and Tariffs Bite

Gold Price Forecast: XAU/USD Pullback Inside Elevated Bull Market

Current XAU/USD Structure and Price Map

Spot gold (XAU/USD) is trading close to $5,121 per ounce, retreating from the $5,178–$5,192 pocket reached during the latest upswing and slipping about 0.6% from roughly $5,150 at the same time yesterday. April futures sit near $5,181, down $45.20 after tagging a fresh three-week high overnight. Even after this move, gold remains about $180 above the $4,941 area from a month ago and roughly $2,206 above the $2,915 zone of a year ago, a jump of around 75–76% year-on-year. The market has broken decisively through the $5,000 threshold, digested a sharp four-session rally, and is now testing how much real demand stands behind these new levels.

Profit Taking and Short-Term Position Reset

The latest slide is classic post-rally behavior. Gold surged more than 2% in the previous session, stretched to a more than three-week high, and drew in a wave of short-horizon long positions. Once spot stalled around $5,190 and futures stalled near $5,269, the rational step for those late buyers was to close out and realize gains. That wave of profit taking removed marginal bids and allowed price to drift from the $5,178–$5,192 band back toward $5,121. This is not a liquidation cascade; it is a controlled unwind of hot money layered on top of a much larger structural move that carried gold from roughly $2,900 to above $5,000 within a year.

US Dollar Strength and External Market Pressures

A firmer US dollar index adds weight to the metal at precisely the wrong time for stretched longs. Because gold is quoted in USD, every tick higher in the dollar makes each ounce more expensive in other currencies, cooling fresh demand outside the United States. That effect is visible both on the screen and in local markets. The dollar bounce has coincided with spot easing from around $5,192 to $5,121 and with April futures losing over $45 on the session, amplifying the impact of profit taking and compressing bids in the short term.

Saudi Arabia Gold Prices as Confirmation of the Pullback

Local pricing in Saudi Arabia underlines that this is a genuine retracement, not just a FX illusion. The gold price slipped from 631.61 SAR per gram to 622.84 SAR, and from 7,366.99 SAR per tola to 7,264.78 SAR. Even in a dollar-linked oil economy, buyers now see lower price tags, which confirms that the current move is a real correction in global terms. For physical demand in that region, this type of reset after a strong run often becomes an entry window rather than a reason to abandon the metal.

Trend, Momentum and Key Support Zones for Gold

Structurally, XAU/USD remains in a strong uptrend. Price has recently bounced from a rising trendline and from the 50-day EMA, reclaimed the $5,000 handle, and pushed to new short-term highs. The first important shelf sits around $5,150, a prior resistance band that has flipped into near-term support. Futures traders are tracking $5,120–$5,100 as this week’s low and as the first serious test of dip demand. Beneath that band, $5,000 is the core psychological line; a clear daily close below that level would signal that the current consolidation has turned into a deeper reset. The medium-term floor is near $4,854.20, identified as solid technical support on the April contract. As long as price holds above that area, the dominant pattern remains a bull market digesting gains rather than a completed cycle.

Upside Barriers: $5,269–$5,300 and the $5,400 Break Point

On the topside, the first important checkpoint is the overnight high at $5,269.40, which marks the top of the latest spike. The next barrier is the $5,300 round figure, where previous buying momentum stalled. A convincing close above $5,300 turns attention to $5,400, described as solid resistance for April futures. That zone is the line between an extended consolidation and a renewed leg of the bull phase. A strong breakout through $5,400 with volume would indicate that the market is ready to reprice gold into a higher distribution range.

Wyckoff Rating, Volatility and Market Tone

Current technical assessment gives April gold a Wyckoff rating of 7.0, which signals that bulls retain a clear advantage, but the market is not in a one-way melt-up. Volatility is elevated; at nominal prices above $5,000, daily swings of $40–$60 per ounce are normal. The present pullback fits that volatility profile. The tape does not show the type of heavy, one-directional selling that accompanies a major top; it shows rotation, short-term profit taking and tactical repositioning within a bullish framework.

Tariff Escalation and the Macro Risk Premium in Gold

The macro backdrop favors a persistent risk premium in gold. New US global tariffs of 10%, with plans to lift the rate toward 15%, are already creating friction with the European Union, which argues that effective levies on some products now exceed the 15% ceiling agreed in prior deals. Parallel moves under Section 232 and Section 301 to examine batteries, industrial chemicals and other sectors reinforce the message that trade policy is drifting toward confrontation, not liberalization. Each step in that direction reinforces demand for assets that sit outside the fiat system. Gold’s surge of more than 25% since early 2025 and roughly 75% over twelve months is not happening in a vacuum; it is the pricing in of genuine policy risk.

Credit Cycle Warnings and Late-Stage Risk Behavior

Signals from the credit side match that story. A major US bank chief executive has already pointed directly to 2005–2007 as a cautionary parallel, noting that some players are “doing dumb things” to chase net interest income. That is classic late-cycle language. When balance sheets stretch and standards loosen, the probability of a sharper correction in risk assets grows. Gold’s move from around $2,900 to above $5,000 while equities climb and credit spreads remain relatively calm tells you that the metal is quietly discounting a future shakeout, even as headline equity indices push higher.

China’s Steady LPR and Global Growth Balance for Gold

The People’s Bank of China has kept the 1-year Loan Prime Rate anchored at 3.0% and the 5-year LPR at 3.5% for nine consecutive months. That stance shows a deliberate choice to support growth without unleashing broad, aggressive easing. China achieved roughly 5% growth last year, but policymakers are still dealing with trade tensions, structural imbalances and geopolitical uncertainty. For gold, that combination means no runaway boom that would crush safe-haven demand, and no immediate policy panic that would eliminate the need for hedges. Instead, it preserves a steady floor of global macro risk that justifies higher gold allocations even after the recent rally.

Dollar, Yields, Oil and Their Combined Effect on XAU/USD

The external asset mix remains mixed for gold. The US dollar index is firm, the 10-year Treasury yield sits near 4.04%, and crude trades close to $66.50 a barrel. A stronger dollar and positive real yields are headwinds because gold offers no coupon and competes with interest-bearing assets. However, those yields exist within a world of higher tariffs, late-cycle corporate behavior and lingering inflation. If upcoming data force markets to reassess the durability of restrictive policy, the dollar can weaken quickly, and gold tends to move before that re-pricing becomes obvious in rates markets.

Central Bank Accumulation and Structural Support

Central banks remain a critical source of demand. Monetary authorities have been steady net buyers, adding gold to diversify reserves and hedge against currency and geopolitical shocks. That flow is strategic, not tactical; it does not vanish because futures dropped $45.20 in one session. At levels above $5,000, central banks focus on long-term resilience rather than short-term chart patterns. Their presence under the market helps convert sharp intraday drops into buyable dips instead of capitulation events.

Gold Versus Equities and the Role in Portfolio Construction

From 1971 to 2024, broad equity markets delivered roughly 10.7% annual returns, while gold averaged around 7.9%. That difference explains why gold is not the core growth engine. Its role is to protect capital when risk assets misprice macro shocks. The last year illustrates that role clearly: gold up around 75–76%, driven by inflation, policy shifts and geopolitical risks, while stocks face tariff noise and credit warnings. Selling gold aggressively on a 0.6% pullback from $5,150 to $5,121 in this environment ignores the entire reason the metal was accumulated in the first place.

Physical Demand, Local Markets and the $5,000 Pivot

The reaction in markets like Saudi Arabia, where prices dropped from 631.61 SAR per gram to 622.84 SAR and from 7,366.99 SAR per tola to 7,264.78 SAR, shows that the correction is being transmitted directly into physical channels. If spot revisits the $5,000 region, that local easing is likely to trigger more physical buying, particularly from participants who missed the prior leg higher. That demand, layered under futures flows, strengthens the defense of the $5,000 pivot.

Upcoming US Data, Volatility and Short-Term Scenarios for XAU/USD

The next catalysts sit on the macro calendar. US inflation and labor market releases, along with fresh central bank commentary, will drive expectations for real yields and for the dollar. A hotter inflation print, combined with hawkish language, can keep pressure on gold and extend the consolidation, possibly forcing a retest of $5,100–$5,000. A softer set of figures, or any signal that the cost of tight policy is becoming too high for growth, would hit the dollar and support a renewed push toward $5,269–$5,300 and then $5,400. In the near term, the likely pattern is volatility around well-defined levels rather than a straight-line move.

Strategic View: Levels, Risk Lines and Bias on Gold

Putting the structure together, XAU/USD trades around $5,121, with a four-session winning streak just broken and support layers at $5,150, $5,120–$5,100, $5,000, and finally $4,854.20. Resistance stands at $5,269–$5,300, then $5,400. Central bank accumulation, tariff escalation, late-cycle credit signals and still-elevated inflation risk all argue that this pullback is more likely a pause than a peak. The tactical map is clear: treat $5,150–$5,000 as the primary accumulation band, watch $5,269–$5,300 as the first upside hurdle and $5,400 as the breakout confirmation, and regard a decisive daily close below $4,854 as the point where the current bull leg loses the benefit of the doubt.

Final Stance: Gold Rating – BUY on DIPS, Not at ANY PRICE

Given the current setup, the stance on gold (XAU/USD) is BUY on dips with strict respect for levels, not blind chase at highs. The pullback from $5,192 toward $5,121 after a four-day surge, a stronger dollar and heavy short-term profit taking is a normal reset inside a powerful trend supported by tariffs, central bank demand, late-cycle signals and macro uncertainty. Portfolios that came into this move underweight gold have been given another window to correct that positioning between $5,150 and $5,000. The correction does not invalidate the bull case; it reinforces it by flushing weak hands and clarifying where real demand is willing to step in.

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