Will you trade gold in Q2 2025? XAU, the dominant safe-haven asset

Thinking about whether to trade gold this quarter? Exness’ trading expert, Michael Stark, breaks down why Q2 2025 could be a game-changer for XAU and what traders should watch next.

Will you trade gold in Q2 2025? With gold surging to historic highs and global uncertainty at a fever pitch, investors are watching XAU more closely than ever. In this article, I explore the key drivers behind gold’s momentum, from monetary policy to shifting geopolitics, and what I’m keeping an eye on in the months ahead.

Key takeaways

1. What’s pushing gold to new highs in 2025? Geopolitical uncertainty and a dovish Fed have made gold the top safe-haven asset so far this year.
2. Why is 3,000 USD so important? Gold’s breakout above this key resistance marks a major technical shift, with potential for further gains or a short-term pullback.
3. Could a Fed rate cut boost gold even more? Yes—with expectations for lower rates in June, real yields are falling, supporting gold’s bullish momentum.
4. How is the dollar impacting gold demand? As the US dollar weakens, global investors increasingly turn to gold as a store of value.
5. Should traders brace for volatility in Q2? With major macro events on the horizon, including the FOMC’s (Federal Open Market Committee) meeting in June, swings could intensify and create new opportunities.

Political and monetary drivers

Gold’s extraordinary rise in Q1 2025 hasn’t come as a surprise. As an analyst, I’ve seen how trade tensions and rising geopolitical uncertainty push investors toward safe-haven assets. Tariff threats, especially from the US, and global instability have caused a noticeable shift in risk appetite. When confidence drops, capital tends to rotate out of risk assets and into stores of value like gold.

On the monetary side, the Federal Reserve’s dovish pivot has only amplified gold’s appeal. The reintroduction of “transitory” inflation rhetoric and expectations of a rate cut in June have pressured real yields lower, historically one of the most important drivers for precious metals. This is the big reason why I'm watching the markets closely, looking out for opportunities to trade gold as policy and political uncertainty continue to intersect.

Technical analysis and key levels

From a charting perspective, gold’s clean break above the 3,000 USD mark was a major event. That level had been a psychological and technical ceiling for a long time, and once it broke, bullish momentum accelerated. I then tracked the 161.8% Fibonacci extension near 3,200 USD as a potential short-term target.

However, some overbought conditions are starting to show. I wouldn’t be surprised to see gold consolidate or even correct slightly before the next leg up. I’m looking at 3,000 USD as a possible new support. If it fails to hold, 2,950 USD could become the next key area of interest. These areas could be important for anyone planning to trade gold over the longer term in this current environment.

Inflation and central bank policy

US inflation hasn’t surged past 3%, but global factors like rising defense budgets and supply chain adjustments continue to exert pressure on prices..Most central banks are treading carefully as decent growth in many major countries means there's no strong pressure to cut rates. 

This caution could support gold, since real interest rates are expected to decline sooner or later. This creates favorable conditions for precious metals, particularly for traders looking to trade gold as part of their broader macro strategy. I’m paying close attention to the Fed’s language in upcoming meetings, as even subtle changes could have an outsized impact on gold’s short-term path.

International factors: Currency and safe-haven demand

Gold’s strength isn’t just a US story. International demand has risen significantly as the US dollar weakens. The euro has found fresh support, and the Japanese yen is benefiting from global capital inflows. This currency dynamic is making gold more attractive for global investors looking to preserve value outside dollar-based assets.

Geopolitical factors—especially in Europe and Asia—are also playing a role. Military spending, trade realignments, and cross-border uncertainty continue to elevate demand for havens. If you’re looking to trade gold from a global macro perspective, these developments are just as critical as domestic economic data.

Outlook for Q2 2025

Looking ahead, I expect Q2 to be an active period for gold traders. If current trends continue, we could see further upside above 3,200 USD or 3,250 USD. If broken, these natural psychological resistances might attract more buying, particularly from momentum-focused traders.

That said, the market might pause to digest recent gains. With the FOMC’s meeting approaching in June, any unexpected economic data could spark sharp moves. I plan to stay flexible and ready to react, especially if the macro narrative shifts. For those of us who trade gold, this quarter could offer a mix of trend opportunities and short-term volatility plays.

Final thoughts

As we enter Q2 2025, gold clearly remains the dominant safe-haven asset. From central banks’ policies to rising geopolitical risks, the drivers behind gold’s strength are firmly in place. While technical indicators suggest a breather could be coming, I see no signs of a broader reversal yet.

This is a time to be strategic, not reactive. If you’re looking to trade gold, keep your eyes on key levels, manage your risk, and don’t underestimate the impact of central banks’ rhetoric. The road ahead may be bumpy, but for traders who are prepared, the opportunities could be significant.