Gold Price Forecast: XAU/USD capitalizes on resurgent haven demand, $5,100 in sight?

Gold builds on the recovery from four-week lows beyond $5,000 early Wednesday.
The US Dollar struggles for traction amid data delay and uncertainty over the Fed’s rate outlook under Warsh.
Gold recaptures 21-day SMA. while RSI holds firmly above the midline on the daily chart.

Dhwani Mehta FXStreet

Gold is extending the rebound from monthly lows above the $5,000 threshold in Asian trades on Wednesday, having booked the biggest daily gain since 2008.

Gold’s haven demand returns, what’s next?

After a two-day rout, Gold is seeing a sustained uptrend as buyers return with a bang due to resurfacing geopolitical tensions and concerns surrounding the US Federal Reserve’s (Fed) interest rate path under a likely Chairmanship of Kevin Warsh.

Amid hopes of likely talks between the United States (US) and Iran on reaching a nuclear deal by the end of this week, the US shot down an Iranian drone on Tuesday, and armed Iranian boats approached a US-flagged vessel in the Strait of Hormuz, refuelling fears of geopolitical escalation in the Middle East.

Meanwhile, Russia carried out a major overnight drone and missile attack on Ukraine, raising doubts over Moscow's intentions on the eve of talks between the two warring nations.

Additionally, the US Dollar (USD) has paused its two-day positive trajectory, with markets still weighing the Fed under Warsh amid mixed opinions on his likely monetary policy stance. Warsh was a well-known inflation hawk, but after President Donald Trump’s nomination, he is widely expected to push for lower interest rates.

However, shrinking the US central bank's balance sheet will also be on his agenda as he takes over the Fed’s leadership on May 16.

Further, the economic data disruption due to the partial US government shutdown also acts as a headwind to the USD, boding well for the USD-denominated Gold.

On Tuesday, Trump signed a spending deal into law that ends the partial government shutdown and gives lawmakers time to negotiate potential limits on his immigration crackdown, per Reuters. The January jobs report is still unlikely to be released on Friday.

The next trading impetus in Gold could be fetched from the upcoming US ADP monthly Employment Change and ISM Services PMI data, which could help markets gauge the state of the American labor and services markets. This, in turn, could provide hints on the Fed’s monetary policy outlook for March.

At the moment, markets continue pricing in two rate cuts this year, according to Reuters.

Gold price technical analysis: Daily chart

The 21-day Simple Moving Average (SMA) rises above the 50- and 100-day readings, while price holds over all key SMAs to keep a bullish tone. The 50- and 100-day SMAs also advance, reinforcing buyers’ control. The Relative Strength Index (14) prints at 58.61, above the 50 line and supporting positive momentum. Initial dynamic support aligns with the 21-day SMA at $4,813.31, followed by the 50-day SMA at $4,520.99; staying above these levels would preserve the upside bias.

The broader trend backdrop remains firm as the 100- and 200-day SMAs extend their ascent with shorter averages stacked above them, underscoring a well-established bullish structure. Pullbacks would be expected to find deeper demand at the 100-day SMA at $4,260.29, while the 200-day SMA at $3,814.47 underpins the longer-term trend. Holding above the rising short-term average would keep the advance on track, whereas a close beneath $4,260.29 could shift focus toward $3,814.47 and signal a broader consolidation phase.

(The technical analysis of this story was written with the help of an AI tool.)

Economic Indicator

ADP Employment Change

The ADP Employment Change is a gauge of employment in the private sector released by the largest payroll processor in the US, Automatic Data Processing Inc. It measures the change in the number of people privately employed in the US. Generally speaking, a rise in the indicator has positive implications for consumer spending and is stimulative of economic growth. So a high reading is traditionally seen as bullish for the US Dollar (USD), while a low reading is seen as bearish.

Why it matters to traders?

Traders often consider employment figures from ADP, America’s largest payrolls provider, report as the harbinger of the Bureau of Labor Statistics release on Nonfarm Payrolls (usually published two days later), because of the correlation between the two. The overlaying of both series is quite high, but on individual months, the discrepancy can be substantial. Another reason FX traders follow this report is the same as with the NFP – a persistent vigorous growth in employment figures increases inflationary pressures, and with it, the likelihood that the Fed will raise interest rates. Actual figures beating consensus tend to be USD bullish.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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