- Rising geopolitical and trade tensions are supporting gold’s uptrend, with potential to reach new all-time highs.
- Major banks’ forecasts and market updates provide guidance for traders navigating volatility in gold prices.
Gold prices resumed edging higher by 71.90 points or 1.43% due to the escalation of geopolitical tensions. Spot gold price is currently trading around $5064 per ounce. The ongoing trade tensions increase the safe-haven demand. In turn, it raises the fear of a new US government shutdown. Moreover, the rising expectations of further Fed easing are encouraging demand for the yellow metal.
This article explores the market updates influencing gold prices, the technical outlook for gold (XAUUSD), highlights key upcoming events to watch, and covers major bank forecasts for gold prices in 2026.
Key Market Updates Influencing Gold Prices:
Because gold is a safe-haven asset, its demand is rapidly increasing since US President Donald Trump’s threat to invade Greenland. He also threatened to impose tariffs against those who are against his proposals. In turn, these threats have caused significant conflicts and stress to the US-EU relationship. Currently, all eyes are on Trump’s tariffs:
- Trump announced that he is raising tariffs on South Korean imports by 25%. He justified this move by saying that Korea “is not living up” to a trade deal reached last year.
- He also announced on a post on social media that he will impose tariffs on South Korea from 15% across the board, different types of products, including automobiles, lumber, pharmaceuticals, and “all other reciprocal tariffs.”
- South Korea responded to the announcement by denying it, stating that it had not received any official notice of a decision to raise tariffs, and calling for urgent talks with Washington over the issue.
- On Saturday, Trump threatened Canada with 100% tariffs if it signed a trade deal with China. In response, Chinese officials said that Canada’s “strategic partnerships” do not mean undercutting relationships with other countries.
- On the other hand, market participants are closely paying attention to how U.S. President Donald Trump could react to the free trade agreement between India and the EU.
- On Tuesday morning, the EU and India announced their free trade agreement, calling it “the mother of all deals.” This agreement is widely seen as a strategic hedge against volatile U.S. trade policies.
- The EU-India trade deal wouldn’t be in Trump’s favor, and he will most likely have a significant reaction to it.
With these rising tensions, gold prices are likely to resume their uptrend and reach new all-time highs. Let’s now turn our focus to major banks’ expectations for gold prices amid these developments.
Major Banks’ Expectations for Gold Prices:
Deutsche Bank said on Tuesday that they expect gold prices to jump to $6000 per ounce in 2026 due to risk-averse sentiment, which will increase gold demand.
Societe Generale analysts also expected that gold prices could reach $6000 per ounce by the end of the year. Last Monday, Morgna Stanley stated that gold could continue rising with a possibility to reach $5700 per ounce.
The Technical Outlook for Gold Prices:
Gold price is moving inside an ascending channel, and a break above the upper boundary could open the way for new all-time highs, supported by ongoing geopolitical tensions. Any correction toward the lower boundary of the channel or below could be seen as an opportunity for bullish entries, reinforcing the uptrend.
The MACD indicates that bullish momentum is still intact, suggesting traders should watch for short-term consolidation. The RSI is in overbought territory near 72, signaling that gold is slightly overextended. However, it remains above 60, supporting the continuation of the bullish trend unless a strong reversal occurs.