Gold forecast: Breakout or breakdown? – $3,350 level holds for $3,400 target

• Gold respects key demand at $3,350, buoyed by trade war fears and record central bank accumulation.
• Bullish scenario plays out, with price reacting to the Bullish Fair Value Gap and eyeing breakout above $3,370.
• Technical forecast leans bullish.
• $3,400–$3,450 in sight if $3,340 support holds; invalidation below FVG risks $3,310–$3,260 pullback.

Gold renews strength, gears up for another run

Over the past week, gold has tightened its grip as a safe-haven asset, buoyed by increasing global economic uncertainty and trade tensions. U.S. threats of hefty tariffs on the EU and Mexico have driven prices to a three-week peak around $3,354-$3,370 level. Meanwhile, central banks have been accumulating gold at record pace purchasing over 1,000 tons annually, with 43% planning more acquisitions in the next year. This institutional demand underpins gold’s long-term strength.

Tariff threats + bank accumulation

US – EU/Mexico tariff threats

President Trump's proposal of a 30% tariff on EU and Mexican imports triggered safe-haven flows into gold, lifting spot prices to $3,355-3,370.

Central bank accumulation

World Gold Council data shows central banks buying more gold annually than in the previous decade, driving gold to its record high of $3,500 in April.

Bullish scenario unfolding from fair value gap

Previous Analysis: Bitcoin Breaks Out, Gold Eyes $3,400, Nasdaq Powers Up, USD up next? – What’s Next for this week?

Gold's current price behavior aligns precisely with what we outlined in yesterday’s live trading session: a pullback into the $3,350 Bullish Fair Value Gap, followed by an anticipated continuation.

Current

This clean structure showcases:

• A bullish FVG marked between $3,340-$3,350, acting as support.
• Price dipped slightly after failing to break $3,370, yet held above $3,350, respecting the bullish order flow.
• Our projection was for price to reject the FVG, re-accumulate, and then push up to the $3,370 high with $3,400-$3,420 set as targets.

Bullish validation

• We are still bullish unless price breaks below $3,340 (invalidating the FVG).
• If $3,370 breaks cleanly, the next upside targets are $3,400 and $3,450.
• This zone was emphasized as a "must-hold level" for gold bulls to maintain momentum.

Technical outlook

Bullish scenario: FVG rejection and breakout toward new highs

Gold is showing signs of bullish continuation after successfully retesting the $3,350 Bullish Fair Value Gap (FVG). The recent higher low formed above this level confirms that buyers are stepping in aggressively to defend and hold the line.

Bullish Confirmation:

• Price rejected from the FVG and formed a bullish engulfing candle with follow-through
• Price now eyes the $3,365.77 minor resistance for a breakout.

Invalidation: Break and close below $3,340.

Upside Targets:

• $3,400 – Key psychological and structural target.
• $3,450 – All-time high level target.

This scenario aligns with our current bias bulls remain in control as long as the FVG holds and price continues printing higher lows.

Bearish scenario: FVG breakdown signals deeper pullback

If price fails to break and hold above $3,365.77 and closes below the $3,350-$3,340 Bullish FVG, this could trigger a deeper sell-off.

Bearish Trigger:

• Rejection from $3,365.77.
• Breakdown below $3,340.

Invalidation: Bullish breakout above $3,370.

Downside Targets:

• $3,310 – Liquidity zone.
• $3,285 – Previous support.
• $3,260 – Swing demand area.