Gold’s strong start to the year continued as prices surged past February’s highs, briefly touching the key $3,000 level. Let’s take a look at what’s driving golds rally and the key levels to watch this week.
Trump’s trade wars send gold demand soaring
Gold’s strong start to the year has been fuelled by escalating trade tensions, with Donald Trump’s tariff policies injecting fresh uncertainty into global markets. The prospect of higher trade barriers has raised concerns over economic growth, prompting investors to seek safety in gold as a hedge against volatility.
Central banks have also played a key role in supporting prices, with net purchases remaining elevated. In 2024, global central banks bought over 1,000 metric tons of gold for the third consecutive year and are expected to continue their buying spree into 2025, according to the World Gold Council. This ongoing accumulation is part of a broader shift by emerging market economies to diversify away from US dollar reserves, enhancing gold’s status as a long-term store of value.
Meanwhile, expectations of interest rate cuts continue to provide a tailwind. With markets increasingly pricing in Federal Reserve easing, real yields have softened, making non-yielding assets like gold more attractive. Inflation concerns remain another factor, as investors turn to gold to protect purchasing power in an environment of persistent price pressures.
Breakout confirmed, but can gold hold $3,000?
Gold’s long-term uptrend has been relentless with prices climbing more than 13% since the start of the year. After a shallow 4% pullback in late February, the metal moved into consolidation before breaking higher last week. That breakout saw gold briefly test $3,000 before meeting resistance, forming a small bearish pin-bar candle—a sign of hesitation at this key psychological level.
One of the strongest technical signals for gold is the widening gap between its 50-day and 200-day moving averages. With the shorter-term trend accelerating above the longer-term measure, this divergence underscores the strength of bullish momentum. However, the breakout did not occur on elevated volume, and RSI has yet to reach new highs, suggesting some short-term caution.
If gold can hold above $3,000 with conviction, it could open the door to further gains. However, a failure to sustain the breakout could see a retest of key support zones around $2,956 and $2,930-2,928. Given the underlying strength of the trend, any pullbacks could present new opportunities for buyers looking to position for further upside. The next test will be whether gold can establish $3,000 as a new floor.
Gold Daily Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Trump’s trade wars send gold demand soaring
Gold’s strong start to the year has been fuelled by escalating trade tensions, with Donald Trump’s tariff policies injecting fresh uncertainty into global markets. The prospect of higher trade barriers has raised concerns over economic growth, prompting investors to seek safety in gold as a hedge against volatility.
Central banks have also played a key role in supporting prices, with net purchases remaining elevated. In 2024, global central banks bought over 1,000 metric tons of gold for the third consecutive year and are expected to continue their buying spree into 2025, according to the World Gold Council. This ongoing accumulation is part of a broader shift by emerging market economies to diversify away from US dollar reserves, enhancing gold’s status as a long-term store of value.
Meanwhile, expectations of interest rate cuts continue to provide a tailwind. With markets increasingly pricing in Federal Reserve easing, real yields have softened, making non-yielding assets like gold more attractive. Inflation concerns remain another factor, as investors turn to gold to protect purchasing power in an environment of persistent price pressures.
Breakout confirmed, but can gold hold $3,000?
Gold’s long-term uptrend has been relentless with prices climbing more than 13% since the start of the year. After a shallow 4% pullback in late February, the metal moved into consolidation before breaking higher last week. That breakout saw gold briefly test $3,000 before meeting resistance, forming a small bearish pin-bar candle—a sign of hesitation at this key psychological level.
One of the strongest technical signals for gold is the widening gap between its 50-day and 200-day moving averages. With the shorter-term trend accelerating above the longer-term measure, this divergence underscores the strength of bullish momentum. However, the breakout did not occur on elevated volume, and RSI has yet to reach new highs, suggesting some short-term caution.
If gold can hold above $3,000 with conviction, it could open the door to further gains. However, a failure to sustain the breakout could see a retest of key support zones around $2,956 and $2,930-2,928. Given the underlying strength of the trend, any pullbacks could present new opportunities for buyers looking to position for further upside. The next test will be whether gold can establish $3,000 as a new floor.
Gold Daily Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.