Gold prices are set for a possible surge after recent consolidation, as US rate cuts come into view. Emkay Wealth Management believes a softer dollar and lower yields could propel the yellow metal higher.

Last week's bearish formation got met with a renewed breakout, taking gold up 2% from its 3,284 lows. Click to read.

Gold prices edged higher on Thursday, helped by a slight retreat in the dollar and bond yields, while investors kept a close tab on trade negotiations as U.S. President Donald Trump broadened his tariff war.

The upward momentum in yellow metal is expected to continue due to two factors. Firstly is the direction of US rates and secondly, the expectation of a decline in the dollar. Both factors will be heavily swayed by US tariffs and trade uncertainties,

Producers of metals and other raw materials fell as the dollar advanced against peers. Gold futures rose, closing within 2.5% of all-time highs after President Trump threatened blanket tariffs of 35% on an array of Canadian imports, the latest escalation in a clash between Trump and Prime Minster Mark Carney.

The U.S. president, whose global wave of tariffs has upended businesses and policymaking, said the European Union will receive a letter "today or tomorrow". Both Nasdaq futures and S&P 500 futures fell about 0.4%. EUROSTOXX 50 futures dropped 0.6%. The euro slipped 0.3% to $1.1668, while the dollar gained 0.4% to C$1.3704.

As de-dollarization gains momentum, rising central bank gold purchases and widening currency swings signal that investors should hedge by keeping a modest 5%–10 % gold allocation and diversifying into select assets not denominated in dollars.

Gold prices hover as traders await US rate clarity and dollar weakness to fuel the next big rally, says the Emkay Wealth report.

Gold's performance is influenced by geopolitics, trade wars, and central bank reliance, with negative consequences affecting the dollar index and gold.

Gold prices extended their fall to a more than one-week low on Wednesday, as investors favoured the dollar after U.S. President Donald Trump's latest tariff threats reignited fears of a global trade war.