Gold had a strong evening, and traditional markets saw another leg down. Pushing past US$2,987 per troy ounce, gold seems to be setting its sights on the US$3,000 level – a significant psychological level. This rally has built momentum over three days, there’s every chance the yellow metal closed above the US$3,000 mark by the weekly close of trade.
So what’s driving the rally?
Turmoil. U.S. trade policies—especially around tariffs—have created uncertainty and market confusion. This environment has investors more conscious of their gold allocation - as they seek a safe haven. At the same time, recent signs of lower inflation have sparked hopes that the Federal Reserve might ease its policies soon – something which is positive for asset prices, thus gold prices. However, the cooling inflation also hints at a slowing economy, which adds to concerns about a possible recession, where gold play it’s ‘hedging’ role.
On the international front, the peace talks to resolve the conflict between Russia and Ukraine add another layer of complexity to the equation.
From a technical analysis perspective, if the US$3,000 figure is broken, some indicators suggest that prices could climb even further—to targets like $3,354, $3,396, or even $3,600, which would firmly push the metal to $5,250+ price in our local currency (AUD).
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