Gold Price Forecast: XAU/USD edges higher above $4,650 as Trump tariffs spark safe-haven demand

• Gold price drifts higher to around $4,670 in Tuesday’s early Asian session. 
• Trump announced new tariffs against eight European countries, boosting safe-haven flows. 
• Analysts anticipate a pause at the upcoming Fed meeting.

Gold price (XAU/USD) edges higher to near $4,670 during the early Asian session on Tuesday. The precious metal is set to hit a fresh record high as traders flock to safe-haven assets amid a persistent geopolitical and economic outlook.

US President Donald Trump said on Saturday that he would impose new tariffs on goods from eight European countries that reject his plan to acquire Greenland. The countries affected include Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and the United Kingdom (UK). 

The announcement fueled concerns about a broader trade war and boosted traditional safe-haven assets such as Gold. Meanwhile, reports have suggested that the European Union (EU) is considering responding with a €93 billion package of tariffs on US imports.

"Gold has hit fresh record highs on its glittering run upwards," said Susannah Streeter, chief investment strategist at Wealth Club. "The precious metal is holding even more allure as a safe haven as worries spread about the repercussions of the US aggressive trade and geopolitical policies."

Most analysts expect the US Federal Reserve (Fed) to pause its monetary-easing campaign later this month due to stabilizing labor market conditions. Markets are currently priced in nearly a 5% chance of a Fed rate cut in the January policy meeting, according to the CME FedWatch tool. 

Morgan Stanley analysts updated their forecast for 2026, projecting one rate reduction in June and another in September, instead of in January and April. The view that the US central bank can keep interest rates higher for longer generally underpins the US Dollar (USD) and weighs on the non-interest-bearing assets like Gold.