(Kitco News) – Gold prices saw a slow and steady start to the week, but escalating trade tensions and a potential pivot signal from Powell drove the yellow metal to new heights once again.
Spot gold kicked off the week trading at $3,180 per ounce before popping back above $3,220 early Sunday evening. After a quick retest of support at $3,200, gold settled into a relatively narrow $35 trading range for the next three days, with spot gold closing out Tuesday’s North American trading session at $3,231 per ounce.
But as had been the case often over the last few weeks, the fireworks happened during the Asian session, which saw spot gold rocket all the way to $3,290 shortly after 1:00 a.m. Eastern. By the time European traders jumped on board, gold had broken the $3,300 barrier, and when markets heard Fed chair Jerome Powell's scathing assessment of the impact of the Trump administration’s tariffs on inflation and growth, they pushed gold to a fresh all-time high just shy of $3,360 per ounce.
Gold prices did pull back Wednesday evening, and the spot price dropped to a session low $3,284 during Thursday's trading, but the yellow metal quickly reclaimed $3,200 and traded comfortably above that level heading into the long Easter weekend.
The latest Kitco News Weekly Gold Survey showed industry experts and retail traders reining in their bullish bias on gold prices as the yellow metal breathes rarified air above $3,300 per ounce.
“Up,” said Adrian Day, president of Adrian Day Asset Management. “Momentum remains with gold, particularly with volatility in the stock market. The reasons for gold buying over the past two year remain.”
“Gold reached a record high near $3358 and looks set to consolidate in holiday-thinned markets,” said Marc Chandler, managing director at Bannockburn Global Forex. “Initial support may be near $3250. Some consolidation may be needed to keep the bull orderly. Buying on pullbacks remains likely given the larger macro backdrop. $3500 seems like a reasonable target in the coming weeks.”
“TRADING TOP,” said Mark Leibovit, publisher of the VR Metals/Resource Letter. “SHORT VIA ZSL AND GLL.”
“Up,” said James Stanley, senior market strategist at Forex.com. “It’s been another massive week, and I still don’t see any reason to change bias. It is increasingly difficult to chase the move higher given bullish momentum but there’s also no clear evidence yet that the move is over.”
Sean Lusk, co-director of commercial hedging at Walsh Trading, said the market is still in the throes of a full-on flight to safety, and gold continues to benefit from the fear.
“They're taking a little profit today, as they should ahead of a three-day weekend, but we'll see what they do with the dip,” he said.
Lusk sees investment pouring into gold from every quarter. “You’ve got the spec community buying, you’ve got the people on TV telling you to buy, you’ve got central banks continuing to buy,” he said. “We hit our 25% higher on the year target at $3,301. Next level up is $3,434, somewhere in that area.”
“I don't know if we get there, this seems way too overdone,” he added. “But the stock market is going to remain volatile.”
Lusk said that however Trump’s tariff threats shake out, Fed chair Powell signaled a potential pivot of his own yesterday, and markets would do well to listen.
“He was more hawkish than anybody thought possible,” he said. “He also said the jobs market is on real good footing, so that leads me to believe they don't think there's going to be a recession. Neither do I, not when they have job numbers like this. That's what I took out of it. As of right now he is right, the numbers don't bear that out at all. But you haven't seen the repercussions of some of these actions, and you won't until the end of the second quarter.”
Lusk expects the uncertainty surrounding trade tariffs will continue to dominate global markets, which will continue to push gold prices higher.
“Provided that nothing new enters into the market, like a trade deal or an announcement that the U.S. and China are talking, I think the trajectory obviously is still up,” Lusk said. “This is a minor little blip here of profit taking into a three-day weekend. All-time highs create some pullbacks. But nothing has changed, because nothing has changed on the tariff front.”
“When you have more uncertainty, the gold market is going to lean to the upside, dips are going to be bought, and that's what's happened,” he added. “I think this thing has another run up to that 30% target up at $3,440, in that area. I think that would be it though.”
This week, 16 analysts participated in the Kitco News Gold Survey, with Wall Street pulling back from last week’s near-unanimous bullishness while still maintaining a strong bullish bias. 10 experts, or 63%, expected to see gold prices rise once again during the week ahead, while four others, representing 25%, predicted price declines for the precious metal. The remaining two analysts, or 12% of the total, saw gold holding steady near its new highs.
Meanwhile, 312 votes were cast in Kitco’s online poll, with Main Street sentiment also scaling back somewhat. 195 retail traders, or 63%, looked for gold prices to rise higher next week, while another 57, or 18%, expected gold to trade lower. The remaining 60 investors, representing 19% of the total, saw prices trending sideways during the week ahead.
Related news
