Gold prices reached an all-time high of $3,168 on April 3, before declining to $2,957 on April 7, 2025 — a drop of around 7%. This correction is mainly attributed to two key factors: profit-taking and liquidation by investors to cover losses in other asset classes such as equities and cryptocurrencies. Currently, gold is trading above the $3,100 level, marking an impressive 19% gain year-to-date. This outperformance, compared to riskier assets like Bitcoin and global equities, reflects growing investor concerns and a renewed flight to the traditional safe haven: gold.
Both fundamental and technical factors appear to support the continuation of gold’s upward momentum in the coming period, driven by several key factors:
- The trade war between the Trump administration and several countries, particularly China.
- Persistent U.S. inflation — consumer and producer prices remain elevated.
- Central bank purchases — global central banks, led by the People’s Bank of China, continue to boost their gold reserves, supporting demand and prices.
- A weaker U.S. dollar, which typically boosts gold prices.
Markets are closely watching today’s release of the U.S. Consumer Price Index (CPI) at 4:30 PM UAE time, with expectations pointing to a 2.5% year-on-year increase, down from 2.8% in February 2025.
From a technical perspective, a key support level lies at the 50-day moving average of $2,953, which has not been breached. There is also continued alignment among the 20-, 50-, and 200-day moving averages — a sign of a sustained bullish trend in gold over the medium to long term. The Relative Strength Index (RSI) currently stands at 63, indicating ongoing bullish momentum.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
