Recently, the gold market has been shining brightly, with prices fluctuating between $2,900 and $2,950. Since the beginning of 2024, gold prices have surged by 27%. The driving forces behind this rally are not only Trump’s tariff policies and the Federal Reserve’s monetary policy but also escalating geopolitical tensions. Several institutions have even raised their year-end target price to $3,100. Clearly, the ongoing tariff war and the Russia-Ukraine conflict have acted as catalysts for gold’s price surge. Despite a slight pullback from last week’s highs, gold has recorded an impressive eight-week winning streak—the longest since 2020—reflecting the market’s insatiable appetite for the precious metal, akin to desserts at a food festival.

However, growing optimism about a potential ceasefire agreement between Russia and Ukraine has become a hot topic. Easing geopolitical risks seem to have shifted investor sentiment, possibly creating an opportunity for a gold price correction. Some investors have opted to take profits following the price surge, reflecting a degree of market caution. This adds another layer of complexity to gold market dynamics, leaving many wondering about the next move.

From a technical standpoint, gold has been on a strong upward trajectory without significant corrections. A pullback before resuming the uptrend would be reasonable. Currently, prices are consolidating within a horizontal channel at high levels, with key resistance around $2,960–$3,000. In the short term, traders should watch for potential bearish signals around this zone. If gold breaks below the channel, the speed of the decline will help determine short-selling opportunities. The first medium-to-long-term retracement target is $2,790, followed by $2,730. On the other hand, if a false breakout occurs below the channel, buying opportunities could emerge.

Overall, gold’s future trajectory will continue to be influenced by geopolitical factors and Trump’s policy direction. If inflation rebounds, the Fed may delay rate cuts, further increasing profit-taking pressure on gold prices. Additionally, it is crucial to monitor the latest developments in the Russia-Ukraine conflict. If negotiations falter, gold prices could regain momentum. In summary, significant volatility is expected in the short term.

Hugo Leong

Gold Analyst of Hantec Group