Gold remains steady at $3,324 on Friday after retreating slightly from its recent peak of $3,368. This marks the third consecutive week of gains for the precious metal, driven by persistent geopolitical uncertainty and macroeconomic caution. The latest boost in sentiment follows US President Donald Trump’s announcement that trade talks with China are active, despite China’s refusal to acknowledge these negotiations.
A Chinese commerce ministry spokesperson insisted that the US must lift unilateral tariffs if it is serious about resolving the trade dispute. This has contributed to gold’s continued appeal as a hedge against political risk and market volatility, particularly with inflation cooling and yields falling.
Gold’s Surge in 2025: $700 Gain and All-Time Highs
Gold has gained more than $700 so far in 2025, reaching multiple all-time highs, including a peak of $3,500 this week. The ongoing trade tensions and uncertainty have been key drivers of gold’s performance, as investors seek safe-haven assets amidst geopolitical risks.
Fed’s Stance and Rate Cuts Support Gold
The Federal Reserve’s cautious approach is another significant factor supporting gold prices. Policymakers are not rushing to adjust interest rates, awaiting more clarity on how President Trump’s tariff policies impact inflation and labor market trends. According to market expectations, traders are pricing in 84 basis points (bps) of rate cuts by the end of 2025. This outlook benefits non-yielding assets like gold, which tend to perform well in a low-rate environment.
As IG strategist Yeap Jun Rong notes, “Even if positioning is crowded, structural tailwinds remain intact, especially with emerging markets diversifying their reserves.”
Technical Analysis: Key Support and Potential for Upside
From a technical standpoint, gold is at a crucial juncture. After pulling back from $3,368, the metal is now testing key support levels at the trendline and the 50-period Exponential Moving Average (EMA) at $3,340. If this support holds, gold may continue its upward trajectory.
The MACD indicator is flattening following a bearish crossover, signaling caution. However, if gold manages to hold above $3,320 and forms a bullish candle, targets of $3,368 and $3,414 could be in play in the coming days. A drop below $3,270 would weaken momentum and suggest a potential pullback.
Trading Strategy
Buy: On a bounce from $3,320
Targets: $3,368 and $3,414
Stop: Below $3,270
Traders are advised to be patient and wait for confirmation at the support level. A trendline test without volume or follow-through could indicate a premature entry.
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