Gold set a new price record in on Thursday last week with a break above $3057 per ounce, an all-time high.
But the bullish momentum has cooled off this week and now everyone is wondering if it can continue to sustain this uptrend.
Gold stormed into 2023 in a bullish rage and, for three months, broke one record price after another.
Just last week, the yellow metal set a new all-time high when its price reached $3057.21 per ounce, effectively setting a new resistance level.
Seven days later, the precious metal has surrendered most of these gains and is currently fighting hard to defend the $3k support level.
Factors Preventing Further Ascent for Gold Prices
The last few days have been significant for gold as it has witnessed a significant pullback.
This saw its price drop to $3,002 before a solid bullish defense helped it back above $3015. Two factors may be attributed to this pullback.
First is the stabilized US dollar, which currently revolves around $104 against the basket of major currencies, as tracked by the US Dollar Index (DXY).
Given that USD and gold prices have an inverse relationship, Dollar strengths were then expected to cause a slip for gold.
We also attribute the decline in gold prices – albeit partially – to early investors’ profit-taking.
Such actions exert too much selling pressure on the market, triggering a free fall for the prices of the yellow stone.
Gold Price Prediction for Second Quarter 2025
We remain bullish about gold’s price action throughout 2025, expecting it to rally by a further 6% to peak at $3265 before year-end.
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Its price action for the second will nevertheless be determined by how it ends the first quarter and two other macro factors.
The first is the imposition of further Trump tariffs or equal reaction by US trading partners.
It has already been reported that the EU has been meeting to discuss Trump Tariffs while China has already slapped a 15% tariff on US products.
Secondly, central banks across the world met this month and decided to keep the benchmark lending rates steady. This has also had a slight impact on gold prices.
But the likes of the Fed have already hinted at the possibility of cutting rates two times before year-end.
If Trump tariffs continue causing uncertainty and fears of inflation in the market, gold prices will continue uptrending.
But if global inflation cools and central banks start cutting down interest rates, gold prices will stabilize, with a slight possibility of leaning bearish and losing the $3k support level.
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