Despite the ongoing geopolitical tensions and trade tariff threats, gold prices have struggled to reach new weekly highs, even in the face of potential US President Donald Trump’s tariff announcements. While gold managed to peak above $3030 per ounce, it fell short of yesterday’s high around $3036 per ounce.
Significant ETF Inflows Support Gold Prices
A major factor contributing to gold’s price stability is the notable increase in exchange-traded fund (ETF) demand. On a single trading day, gold-backed ETFs saw an addition of 23 tonnes of gold, the largest daily increase since 2022. In total, during the first quarter of 2025, gold ETFs have gained 155 tonnes, bringing holdings to their highest level since September 2023.
However, despite these gains, ETF holdings are still below the record levels reached in 2020, leaving room for further inflows. If this trend continues, it could further support gold prices. Investors continue to view gold as a hedge against uncertainty, with the ongoing tariff concerns adding to demand for safe-haven assets like gold.
Tariffs and US Economic Data Impact
Earlier in the week, Trump’s announcement of impending copper tariffs in the coming weeks generated a brief rally in gold prices. However, as US economic data was released, including a 0.9% increase in durable goods orders for February 2025, gold prices fell back below the $3020/oz level. The positive data lifted the US Dollar, putting pressure on gold prices, but the haven demand for gold remains strong.
Although short-term economic data releases can affect gold’s price movements, the broader demand for gold as a safe-haven asset remains robust, and geopolitical factors like tariff talks continue to support its appeal.
Technical Analysis: Gold’s Range-Bound Movement
From a technical perspective, gold is currently range-bound, oscillating between the $3004 and $3030 per ounce levels. A break above or below these boundaries could trigger a sharp price move. On the downside, support levels are at $2982 and $2950, while resistance is at $3025, $3050, and $3075.
Outlook: Potential Pullbacks and Continued Demand
While there is potential for a short-term pullback in gold prices, any such dip may be temporary. The ongoing uncertainty surrounding tariffs, trade policies, and global economic conditions is likely to continue fueling demand for gold, keeping it elevated in the long run.
Investors should be prepared for short-term fluctuations in gold’s price but consider any pullbacks as potential buying opportunities in the context of sustained haven demand.
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