Gold prices extended their record-breaking rally into Monday, reaching a fresh all-time high of $3,128.14 per ounce. The continued surge is being driven by growing inflation concerns, aggressive institutional buying, and rising geopolitical tensions. With no immediate technical resistance in sight, gold remains firmly in a “buy strength” and “buy dips” mode, supporting a robust uptrend.
Tariff Anxiety Fuels Safe-Haven Demand
Markets are bracing for U.S. President Donald Trump’s “Liberation Day” tariff announcement on April 2, which traders expect to unveil a more aggressive trade stance. Trump’s decision to impose reciprocal tariffs targeting persistent trade imbalances, along with a blanket 25% tariff on automobiles set to take effect on April 3, has heightened concerns about global supply disruptions and inflation.
The threat of retaliatory measures has revived fears of slowing growth—historically a catalyst for higher gold prices. This shift comes as the MSCI World Index fell 1.2%, signaling a shift from risk assets into safe-haven investments like gold.
Institutional Demand Expands Beyond Central Banks
China’s top four insurance companies, managing a combined ¥13 trillion in assets, have initiated a pilot gold-buying program, expected to result in inflows equivalent to 183 tonnes of gold. This amount represents nearly half of the global central bank purchases made last year.
This strategic move underscores a broader institutional pivot toward gold, viewed as both an inflation hedge and a safeguard against geopolitical risks. Coupled with ongoing ETF demand and central bank accumulation, this institutional buying is providing robust structural support for the current rally.
Technical Setup Signals Continued Strength
From a technical perspective, gold remains in a strong bullish trend. The metal is well above key support at $3,063.80, with a main bottom at $2,999.46 and the 50-day moving average rising to $2,910.70. The Relative Strength Index (RSI) is currently above 77, indicating overbought conditions. However, momentum remains strong, and traders have largely overlooked these stretched readings as geopolitical and policy risks continue to fuel inflows.
Physical Demand Softens, but Momentum Prevails
Retail demand has softened in Asia, particularly in India, where high gold prices and year-end account closures have slowed purchases. Despite this, the broader rally remains largely driven by paper markets and institutional positioning. Demand from ETFs and strategic buyers continues to offset the decline in physical demand.
Gold Price Outlook: Bullish Trend Likely to Continue
With escalating tariff risks, expanding institutional demand, and rising inflation concerns, gold’s upside bias remains intact. The market structure supports further gains, unless there is a sharp reversal in U.S. trade policy or unexpected tightening by the Federal Reserve.
As long as gold prices hold above $3,000, the path remains open for additional gains. Analysts suggest that the $3,500 target is now within reach, especially if the April 2 policy announcement reinforces inflationary pressures.
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