Gold Price Analysis: Will XAU/USD Break $3,000 or Face a Pullback?
Gold's Momentum Faces Resistance Amid Rate Cut Speculation
Gold (XAU/USD) has been on a strong run, testing the $2,930 resistance level after consolidating within a tight range. The metal has shown resilience despite a slight retreat, as traders continue to weigh Federal Reserve rate cut expectations, central bank buying, and shifting geopolitical risks. After hitting a record high of $2,956 last week, gold pulled back and is currently trading at $2,909, reflecting a 1.80% weekly gain. The question now is whether gold has enough momentum to break above $3,000 or if a short-term correction is imminent.
US Jobs Data Weakens Dollar, Strengthens Gold’s Appeal
The February Nonfarm Payrolls (NFP) report came in weaker than expected, with 151K jobs added, missing the 160K forecast. Unemployment also ticked up to 4.1%, fueling speculation that the Federal Reserve could begin cutting interest rates as early as June. With Treasury yields falling and Fed Chair Jerome Powell signaling patience on rate cuts, traders are now pricing in 78 basis points of easing this year, which has weakened the US Dollar Index (DXY) to a four-month low of 103.90.
A weaker dollar typically supports gold by making it more attractive for foreign buyers. Gold’s status as a safe-haven asset is further reinforced by the economic uncertainty surrounding trade tariffs, inflation risks, and slowing US economic growth. If the Fed accelerates rate cuts, gold could surge beyond its recent all-time high, potentially targeting $3,000.
Central Banks Continue Gold Accumulation, Driving Demand
One of the strongest bullish drivers for gold has been persistent central bank buying, led by China and Poland. The People’s Bank of China (PBoC) purchased 10 tonnes of gold in early 2025, while Poland’s National Bank (NBP) added 29 tonnes, marking its largest purchase since 2019.
China has now increased its gold reserves for four consecutive months, signaling a strategic shift to diversify away from the US dollar amid trade tensions and economic uncertainty. With central banks collectively adding over 26.6 tonnes of gold-backed investment fund inflows last month, institutional demand remains a key factor supporting higher gold prices.
Technical Analysis: Is Gold Headed for $3,000 or a Correction?
Gold’s recent price action suggests a strong uptrend, but technical resistance near $2,930 could cap immediate gains. The 50-day and 100-day moving averages remain supportive, with the Relative Strength Index (RSI) near overbought levels—indicating a possible pullback before another breakout attempt.
- Immediate resistance: $2,950, followed by $2,956 (all-time high)
- Support levels: $2,900, $2,855 (previous swing low)
- Breakout target: $3,000 if momentum continues
Gold’s ability to sustain gains above $2,930 depends on next week’s US inflation data. If CPI comes in weaker than expected, gold could rally past $2,950, but if inflation surprises to the upside, Treasury yields may rise, pressuring gold back toward $2,900 or lower.
Trade Tariffs and Geopolitical Tensions Add Uncertainty
Trade policy remains a wildcard for gold prices, with newly imposed 25% tariffs on Mexico and Canada raising concerns about economic uncertainty. While gold traditionally benefits from geopolitical tensions and trade wars, the impact of tariffs on global inflation and economic growth remains unclear.
Meanwhile, easing tensions between Ukraine and Russia, along with Trump’s pressure on Hamas to release hostages, could limit safe-haven inflows into gold in the short term. However, continued trade uncertainty and central bank buying could provide long-term support for gold’s bullish trend.
Final Outlook: Can Gold Maintain Its Rally or Face Profit-Taking?
Gold remains in a strong uptrend, supported by Fed rate cut expectations, central bank demand, and a weaker dollar. The key test will be whether XAU/USD can break the $2,950 resistance and push toward $3,000 or if profit-taking leads to a short-term correction back to $2,855 or $2,800.
If upcoming US inflation data confirms slowing price pressures, gold’s path toward new record highs remains intact. However, if inflation runs hotter than expected, rate cut bets could cool, leading to a pullback in gold prices. For now, the bullish momentum remains dominant, with gold likely to test higher levels in the coming weeks.
