- Summary:
- Gold price is off to a strong start in 2025 and is just 1.2 percent below its record high levels. Could an impending tariff war do the trick?
Gold price continued with its ascent on Wednesday, rising to the highest level since November 1. The commodity traded at $2,727 at the time of writing, registering its third successive daily gain and bringing its gains in 2025 to 5 percent. Concerns over the impact of US tariffs on the dollar’s strength have kept the yellow metal on the uptrend in recent days.
Could Gold Price Break Record Highs?
At its current price, gold is 1.2% below its all-time high price, and a continuation of its current momentum will likely drive it past that mark in the coming days. US President Donald Trump has threatened to impose trade sanctions against China, Mexico, Canada and the European Union in the range of 10%-25% starting from February.
The prospect of retaliation has raised the risk premium on gold prices amid rising safe haven demand. Also, investment buying of the metal is likely to help steer a strong demand in the near-term as yields on treasury yields remain subdued.
However, gold’s geopolitical risk premium is likely to decline significantly in 2025. Israel and Hamas have recently signed a ceasefire deal, while US President Donald Trump reiterated his intention to pursue a peaceful end to the wars in which the nation is involved. That could potentially lead to the easing of hostilities between Ukraine and Russia.
Gold Price Prediction
Gold price pivots at $2,752 and action above that level will favour the buyers to be in control. That will likely see the commodity’s price move to the first resistance at $2,763. However, if the buyers extend their control, it could enable a move past that barrier and potentially push it to test $2,770.
Alternatively, moving below $2,752 will favour the sellers to be in control. If that happens, XAUUSD will likely find initial support at $2,743. The upside narrative will be invalid if the pair loses that support. Also, that could clear the path to test the second support at $2,730.
