Gold soars to record $2,865 this week on weak dollar
Gold hits a record high of $2,865 amid bullish momentum and safe-haven demand.
Gold prices continue their bullish momentum, extending gains for a fifth consecutive day and setting a new record high at $2,865 per ounce.
The metal has risen 2.26% this week and over 9% year-to-date, drawing strength from a weaker U.S. dollar and market uncertainty over U.S. trade policies. However, technical indicators suggest a potential pullback before the next major move.
Gold opened the first week of February at $2,800 per ounce and has maintained a strong upward trajectory. During the Asian session on February 4, it gained 0.67%, climbing from $2,841 to $2,860, before reaching a new all-time high of $2,865 in the European session.
Investors continue to favor gold as a safe-haven asset due to concerns about the economic impact of U.S. trade policies under President Donald Trump, which has weakened the U.S. dollar and further boosted gold’s appeal.
Gold price dynamics (November 2024-February 2025). Source: TradingView
The greenback slipped to a one-week low, pressured by expectations that the Federal Reserve may continue easing monetary policy. A slowing U.S. labor market strengthened the case for further rate cuts, making non-yielding gold more attractive to investors.
Overbought conditions hint at a potential retracement
Despite its strong rally, gold’s rapid ascent has pushed the Relative Strength Index (RSI) on multiple timeframes into overbought territory. This suggests that a short-term peak may be forming, with a possible retracement on the horizon. Key support levels to watch include $2,812 and $2,790, where buyers may step in to cushion any decline.
Traders will now focus on upcoming U.S. economic data, including the ADP private-sector employment report and the ISM Services PMI, which could influence the Fed’s rate outlook and, in turn, gold’s next move. Meanwhile, the psychological $2,900 level remains the next major upside target for the metal.
Concerns over U.S. President Donald Trump's trade tariffs fueled gold's rally, pushing the price to a record high of $2,830. After reaching this peak, gold saw a modest decline.
