Peter Smith
Gold (XAUUSD) consolidates near key support as WisdomTree predicts explosive price action. Base case targets $3,850/oz by Q2 2026, but a "Mar-A-Lago Accord" scenario could trigger a 60% surge to $5,355/oz if Trump pursues dollar debasement.
Gold (XAUUSD) Technical Setup Hints at Major Breakout
Gold's been stuck between $3,180-$3,400 since hitting $3,500 in April, but WisdomTree sees this as "loading the spring" for something big. The $3,180 floor sits on the key 76.4% Fibonacci level, with strong support expected around $3,024 if we dip lower.
This consolidation pattern often precedes explosive moves, especially with current macro conditions aligning for upside.
Five Catalysts Ready to Rocket Gold (XAUUSD) Higher
WisdomTree identified five major drivers that could send gold soaring:
Trade uncertainty remains high despite preliminary China/UK deals. Ongoing negotiations with Canada, Mexico, and EU are stalled, creating persistent market anxiety.
US debt crisis is accelerating. The "One Big Beautiful Bill Act" adds $2.4 trillion to deficits through 2034, pushing debt-to-GDP from 117% to 124%. History shows rising government debt correlates with higher gold prices.
Fed independence faces pressure as Trump criticizes Powell, whose term expires May 2026. Political interference in monetary policy historically benefits gold – remember the explosive 1970s gains.
"Mar-A-Lago Accord" Could Send Gold (XAUUSD) to $5,355
WisdomTree's scenarios paint a bullish picture:
- Base case: $3,850/oz by Q2 2026 (+15% from current levels)
- Bull scenario: $4,475/oz if tariff shocks force aggressive Fed cuts (+34%)
- Bear case: $2,700/oz even in worst-case scenario (still above 2025 levels)
- "Mar-A-Lago Accord": $5,355/oz if Trump pursues 23% dollar debasement (+60%)
The extreme scenario models deliberate dollar weakening similar to the 1985-1987 Plaza Accord, which saw the dollar crash 48%. Even a 23% decline over one year could send gold parabolic, as debt market turbulence would drive safe-haven demand.
Whether through steady appreciation or explosive moves, gold appears positioned for significant gains as macro uncertainties mount over the next 18 months.
Peter Smith
