(Kitco News) – While the gold market may not have seen the outsized gains of the previous week in percentage terms, the yellow metal did manage to establish $3,000 as solid support, which could be a bigger achievement than another new all-time high in the long term.
Spot gold kicked off the week trading at $2,990 per ounce and dipped down to the weekly low of $2,982 in the early hours of Monday morning. But momentum began to pick up for the yellow metal during the European session, and by 7:30 a.m., spot gold bounced off the $3,000 resistance level.
By the time North American traders started their week, gold was trading right at the $2,990 level once again, whereupon U.S. traders mounted their own challenge of $3,000, ultimately succeeding in breaking through just 15 minutes before the close.
From there, it was off to the races, as gold prices would not revisit the $3,000 support level for the next four days.
After Asian and European traders pushed gold to a fresh weekly high of $3,035 per ounce on Tuesday, this became the near-term ceiling for the yellow metal, with spot gold trading in a narrow $5 range until it once again set a new weekly high of $3,045 per ounce just before 2:00 a.m. Eastern.
Wednesday brought more range trading as markets eagerly anticipated the FOMC rate announcement in the afternoon, which also included updated rate projections and what promised to be a significant press conference from Federal Reserve chair Jerome Powell.
A few minutes before the central bank release, spot gold was trading at $3,030 per ounce, but once markets got to see the degree of uncertainty in the Fed’s latest projections, they drove gold prices all the way to $3,048 per ounce by the time Powell's presser began, and the weekly high of $3,057 per ounce was set just after midnight on Thursday.
Following an early morning pullback to retest support at $3,030 per ounce, spot gold continued to oscillate between that level and $3,045 before dropping down to $3,025 in the early hours of Friday morning.
This decline approved prescient, as gold's inability to retake its former elevated support at $3,035 per ounce ultimately resulted in the yellow metal’s steepest drop of the week to just below $3,000 half an hour after the North American open.
Gold found plenty of motivated buyers at that level, however, and after popping back up to $3,015 just before 11:00 a.m., spot gold finished the week trading around $3,020 per ounce.
The latest Kitco News Weekly Gold Survey showed a more even attitude towards gold’s price prospects among industry experts and retail traders, with fewer members on both sides predicting higher gold prices for next week.
“I am neutral on gold for the coming week,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “It looks like it wants to continue consolidating its recent breakout over $3,000 through to the end of the month. Early April gold could get more active as the US is looking to get more serious about tariffs.”
“Down,” said Adrian Day, president of Adrian Day Asset Management. “A pause in the relentless gold advance would be normal, and indeed healthy. We suspect that it will be only shallow and short-lived. The market seems concerned that the Federal Reserve is in no hurry to cut rates, but that is not what has been driving gold up; there is no change in the fundamental drivers of gold.”
“Pullback expected,” said Mark Leibovit, publisher of the VR Metals/Resource Letter. “Overbought here.”
“Lower,” said Rich Checkan, president and COO of Asset Strategies International. “I expect gold to test below $3,000 at least once before holding. This coming week should be that first test. Long-term, there’s no question where I believe this is going. But short-term, I expect a retracement.”
“Up,” said Darin Newsom, senior market analyst at Barchart.com. “I think it’s safe to pencil this response in for the foreseeable future, regardless of price.”
“One of the more telling aspects of the gold market is recent weekly CFTC Commitments of Traders reports (legacy, futures only) shows the noncommercial net-long futures position continuing to decrease, while total open interest in the market increases,” he added. “This tells us support is coming from those traders/investors using gold as a hedge against global economic and political uncertainty. US Fed Chairman Powell said much the same thing this past week, where the word used most often at the conclusion of the FOMC meeting Wednesday was ‘uncertainty.’ Given this, it doesn’t really matter how high the various gold markets are priced, it will still be viewed as a safe haven.”
“Up,” said James Stanley, senior market strategist at Forex.com. “I don’t think that bulls are done yet and I think we’ll see continued testing of 3k in spot. I do think that 3k can stall buyers for a bit, but I still don’t have greater evidence of more profit taking, so I think we’ll see some continued bullish momentum.”
“It does not seem the gold rally is losing momentum, and it would take a bold trader to call the top and bet against gold at this stage,” said Neil Welsh, head of metals at Britannia Global Markets. “Market participants are well aware of the Federal Reserve’s stance on interest rates, ongoing geopolitical risks, uncertainty surrounding U.S. trade policies and tariffs, and the broader shift away from other asset classes. None of these factors appear likely to change significantly in the near term, making a sharp reversal in gold prices unlikely.
“That said, in a crowded trade, there is always the risk that markets can ‘take the stairs up and the elevator down,’” Welsh warned. “In the short term, the $3,000 level is likely to serve as a key psychological support, attracting dip buyers.”
Adam Button, head of currency strategy at Forexlive.com, wasn’t reading too much into gold’s Friday pullback, but he was noticing some interesting new wrinkles in the market.
“I think it's a really mechanical day in markets today,” he said. “You can see that with a lot of the stocks, nothing's changed. I think a lot of people were looking for $3,000 to take profits, and they got it this week. And China's cooled a bit as well. I think a lot of the money has been coming from China.”
“That said, Turkey imploded this week again,” he added. “That's a big buyer of gold. I'm not sure why you would want to owe lira when you could own gold if you're in Turkey.”
Button said that – in a reversal of the pattern markets have seen over the past few months – gold traders are now worrying about downside risk to gold outside of regular trading hours due to the potential for positive developments.
“Weekend risk has been an interesting part of the Trump administration,” he said. “Stocks have been perpetually weak on Friday, and at this point, the tariff rhetoric is so high that the risks are of some kind of cooling on tariffs. Right now, we're in a position where intense tariffs could go on anyone and tariff headline risk is positive for risk assets, negative for gold.”
Button said that it's normal to see rounds of profit-taking after moves as significant as gold’s recent gains. “Pretty intense move today, but bids came up at $3,000,” he said. “If you look at today's price action, that's the tell, is that buyers were waiting at $3,000 and picked it up.
“It might not be the last test of that, but a weekly close above 3,000 is a major milestone,” Button said. “And we're hours away.”
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