Gold prices have experienced a significant upward trajectory, influenced by escalating geopolitical tensions, concerns over inflation, and emerging economic policies. In early 2025, prices surged beyond $2,900 per ounce, prompting speculation that $3,000 might be imminent. As various factors come together to support gold, the question on many people’s lips is: How much further can it rise?
Various current events, including U.S. tariffs and conflicts in the Middle East, have heightened investor interest in secure assets such as gold. This article analyzes the main factors fueling the current rally and highlights what to monitor in the coming months.
A key driver of gold’s increase is the announcement that U.S. tariffs on steel and aluminium will be implemented on March 12. These tariffs will increase the cost of imported metals by 25%, with the goal of safeguarding American manufacturers. Though this policy might provide a temporary advantage to U.S. manufacturers, it is also expected to increase expenses for sectors dependent on steel and aluminium.
Industry experts suggest that this might negatively impact the overall economy in the long term, particularly since steel-consuming sectors greatly surpass those that manufacture it. Investors are seeking gold as a safeguard against possible economic turmoil brought on by the tariffs.
Besides economic issues, geopolitical threats are significantly contributing to the increase in gold prices. Recent remarks by President Trump about Gaza and Middle East strategy have increased uncertainty. His proposal for resettling Palestinian refugees in nearby nations and the threats to cut military assistance to Egypt and Jordan have unsettled markets.
The increasing tension has prompted investors to turn to gold for safety, boosting demand and pushing prices higher.
The U.S. Nonfarm Payrolls report released earlier this month showcased a surprisingly robust labor market. The unemployment rate fell from 4.1% to 4.0%, and wage growth surged by 0.5%, greatly surpassing forecasts.
With yearly inflation at 2.9%, many anticipated the Federal Reserve to intervene. Nonetheless, political pressure and continuous changes in important administrative positions appear to have prevented the Fed from indicating a forthcoming rate increase. This postponement in enforcing monetary policy has offered additional backing for gold prices.
Gold prices have shown significant strength over the last year, breaking key resistance levels and hitting new all-time highs at $2,942 per ounce in early 2025. The upward trajectory highlights a bullish trend driven by global uncertainties, rising inflation, and geopolitical risks. Let’s break down the key developments and technical levels:
RSI: Currently near overbought territory, signalling the potential for short-term profit-taking before the next leg is higher.
MACD Indicator: The MACD is firmly bullish, with positive momentum intact. However, the histogram suggests some slowing momentum, indicating that consolidation or a brief pullback may be possible.
Gold’s performance in the past year has been truly exceptional, with the price climbing from $1,810 to $2,942. The trend continues to be positive, backed by robust technical and fundamental elements. Although a short-term pullback may happen, the overall perspective stays optimistic as long as gold remains above important support levels.
Traders need to pay attention to $2,791 as the primary key level and observe worldwide events that might affect gold’s upcoming trajectory. The $3,000 benchmark is now attainable, and surpassing it might spark a new surge of buying enthusiasm.
This post was last modified on Feb 13, 2025, 11:10 GMT 11:10