Gold price faces potential correction after hitting record $2,830
Gold hits record high of $2,830 amid strong uptrend in 2025.
Gold price strong uptrend in 2025 has continued to attract investor attention, with the precious metal hitting a new record high of $2,830 during the North American session on Monday, February 3rd.
As of February 4th, gold opened at $2,815 and rose slightly during the Asian session before seeing a modest decline in the European session, now trading around $2,812. This marks a year-to-date gain of 7.5%, highlighting the ongoing bullish momentum in the gold market.
A key factor supporting gold’s rally is the backdrop of ongoing concerns over U.S. President Donald Trump's trade tariffs. Recently, Trump temporarily paused tariffs on Mexico and Canada after striking a border security deal, which provided a temporary boost to the U.S. dollar, consequently diminishing the appeal of precious metals.
However, the broader market still faces uncertainties regarding the impact of Trump's protectionist policies, especially as they raise expectations for higher U.S. inflation. Gold, often seen as a hedge against inflation, may stand to benefit further from this backdrop, reinforcing its appeal as a safe-haven asset. This could limit any downside potential in gold prices, suggesting that any pullbacks might be viewed as buying opportunities for traders seeking exposure to the metal.
Gold RSI in overbought territory signals caution
Gold price dynamics (November 2024-February 2025). Source: TradingView.
As evident in price movement, gold has seen a steady climb, with the latest record high showcasing a strong bullish signal. However, with the relative strength index (RSI) on the daily chart currently in overbought territory, caution is warranted. Although the metal has surged, the RSI’s position suggests that a correction could be in the cards. Despite this, any meaningful downturn could find support at the $2,790 level, a key resistance level that capped gold’s all-time high in November and is now expected to act as support.
Looking ahead, gold’s price outlook remains largely positive. As the U.S. faces uncertainty on multiple fronts, the precious metal’s appeal as a hedge against inflation and economic risk is likely to remain strong. The path of least resistance seems to be to the upside, and investors should be prepared for potential dip-buying opportunities at lower levels.
Trump’s trade tariff announcement caused gold prices to initially dip by 1% to $2,771. The subsequent market reaction drove a recovery in gold prices as investors sought safety.
