Gold Price Outlook: Safe-Haven Appeal Remains Strong

As of Thursday morning, June 5, 2025, gold prices continue to hover near recent highs, trading just below $3,400 per ounce. A rise in geopolitical tension and growing uncertainty in the U.S. economy have strengthened gold’s role as a preferred safe-haven asset. That said, with markets waiting for clearer direction, price action has entered a consolidation phase.

Investors are closely monitoring developments in the Russia-Ukraine conflict and any signs of progress (or setbacks) in U.S.-China trade talks. At the same time, weak signals from the American economy are fueling investor interest in gold as a protective hedge.

Spot gold is fluctuating around the $3,370 level, after briefly touching $3,392 on Wednesday. Technical indicators remain broadly supportive, with short-term moving averages trending upwards—pointing to sustained buying momentum.

Key factors influencing gold prices include:

Persistent Geopolitical Risk
With the threat of renewed escalation in Eastern Europe, geopolitical risk remains a dominant force. Investors are leaning more heavily into safe-haven assets like gold, as uncertainty continues to weigh on risk appetite.

Trade Tensions and Tariff Uncertainty
The Biden administration rolled out a new round of tariffs on imported steel and aluminum earlier this week, raising further friction with China. Negotiations remain stalled, with both countries accusing each other of violating prior agreements. However, Washington’s delay of EU-targeted tariffs until July has slightly eased market anxiety—for now.

Weaker Global Outlook, Pressure on the Dollar
The OECD recently cut its global growth forecast, citing slowing U.S. manufacturing demand. Adding to concerns, Moody’s downgraded the U.S. long-term credit rating from Aaa to Aa1, further denting market confidence and putting downward pressure on the dollar. Since gold is priced in dollars, a weaker greenback lends support.

In addition, the Chinese yuan and the People’s Bank of China’s ongoing gold purchases provide another layer of support. China’s recent increase in gold reserves signals a strategic shift toward hard assets.

Expert Opinion and Market Outlook
Jigar Trivedi, Senior Research Analyst at Reliance Securities, notes that given the current economic and political context, gold prices have a high likelihood of staying resilient. He cites the U.S. credit rating downgrade, persistent central bank buying, and unresolved trade tensions as factors that could keep gold supported—or even push it higher in the near term.

From a technical perspective, support is seen at $3,345. If prices hold here and rebound, a move toward $3,390 or even $3,465 can be expected. A drop below $3,305, however, could signal further downside risk to around $3,265.

In sum, gold remains in a broadly bullish trend. With rising global instability and weakening U.S. fundamentals, gold’s safe-haven qualities are once again in focus. In the short term, political negotiations and macroeconomic data will be key drivers—investors are advised to stay flexible and closely monitor market developments.