Gold Price Forecast: XAU/USD conquers the $4,700 mark on Trump’s threats

XAU/USD Current price: $4,750

• US President Donald Trump keeps threatening tariffs to achieve his goals.
• The US will release updates to the Gross Domestic Product and PCE Price Index on Wednesday.
• XAU/USD is extremely overbought, but risk aversion favors higher highs ahead.

Spot Gold trades north of $4,750 on Tuesday, clinching yet another record high as risk aversion continues to drive financial markets. The run to safety was once again triggered by the United States (US) President Donald Trump, who keeps battling the world to Make America Great Again.

Not happy with the monetary policy, President Trump has gone above and beyond to influence the Federal Reserve (Fed). His desire to lower interest rates further has raised concerns about the Fed’s independence and heightened uncertainty. In the meantime, Chair Jerome Powell’s mandate ends in May, and his replacement has been a big question mark that the White House promises to answer soon, but never does.

Trump is also unhappy with how the world “unfairly” treats America. Widespread tariffs announced in 2025 were just the tip of the iceberg, and he did not stop them from having better trade deals. He is now using levies as a weapon to achieve other goals.

On the one hand, he threatened tariffs on several Nordic countries to force Denmark into selling Greenland to the US. His latest threats fell into France, as the government's doubts about joining Trump’s “Board of Peace,” meant to supervise the next phase of the Gaza peace plan. At this point, not even Israel has confirmed his participation, but indeed, Trump did not refrain from inviting even the Russian President, Vladimir Putin.

Source: Image generated by AI, shared by US President Trump in Truth Social

As US President Trump makes announcements, uncertainty piles up, forcing investors away from high-yielding assets and straight into Gold.

Meanwhile, market participants await clues about the US economic health. The country will release on Wednesday updated Gross Domestic Product (GDP) estimates and Personal Consumption Expenditures (PCE) Price Index figures from October and November. PCE inflation is closely watched, as is the Fed’s preferred inflation gauge. However, these old figures have lost relevance and may have a limited impact on the USD, overshadowed by the ongoing war between President Trump and Chair Powell.

XAU/USD short-term technical outlook

From a technical point of view, XAU/USD is overextended but still bullish. In the 4-hour chart, XAU/USD develops above all its moving averages, with the 20-period Simple Moving Average (SMA) climbing above the 100- and 200-period SMAs. The 20-period SMA offers dynamic support at $4,653.79, followed by the 100-period SMA at $4,506.90 and the 200-period SMA at $4,411.78. At the same time, the Relative Strength Index (RSI) indicator maintains its bullish slope at 73, while the Momentum indicator also aims firmly higher at extremes, without signs of upward exhaustion.

In the daily chart, XAU/USD trades far above all its moving averages, with the 20-day SMA accelerating north above the 100- and 200-day SMAs, while providing support at $4,497. At the same time, the RSI indicator and the Momentum indicator keep heading firmly north, despite being at extreme levels, hinting at higher highs ahead.

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