Gold price reaches new all-time high of $2,880
Fed rate cut expectations boost gold rally
βGold price have extended its bullish momentum, surging to a new all-time high of $2,880 per ounce during Wednesdayβs North American session.Β
This marks a gain of over 3% beyond the previous record of $2,790. Despite overbought technical conditions, the metal has sustained strong upward momentum, accumulating nearly 10% gains within the first quarter of 2025. However, after reaching the new peak, gold retraced slightly, closing at $2,866 yesterday, and has since traded with limited volatility at $2,860 during todayβs European session. The next key milestone of $2,900 per ounce is now within 1% reach.
The rally comes as investors seek safe-haven assets amid concerns about a U.S.-China trade war and the economic implications of U.S. President Donald Trumpβs trade tariffs. These uncertainties, alongside expectations that the Federal Reserve will continue cutting interest rates in 2025, have strengthened goldβs appeal. Additionally, the recent decline in U.S. Treasury bond yields has further supported demand for the non-yielding metal.
Gold price dynamics (October 2024-February 2025). Source: TradingView
Overbought RSI and equity market strength limit aggressive gold buying
Despite these bullish factors, gold prices face short-term resistance due to overbought conditions in the daily chart. The Relative Strength Index (RSI) has indicated stretched momentum, prompting a brief consolidation phase. While this suggests a potential for a temporary pullback, the broader trend remains intact as fundamental drivers continue to favour gold.
Considering the equity markets which have maintained a generally positive tone also limit aggressive buying in gold for now. However, if risk sentiment shifts or economic concerns intensify, traders may look to further accumulate positions.Β
With gold now hovering near $2,860, the focus remains on whether it can break above $2,900 and establish new highs. Overall, goldβs trajectory remains upward, supported by economic uncertainties, Fed rate cut expectations, and declining yields.
The weaker U.S. dollar supported goldβs rally, pushing prices up 2.26% this week. Gold hit a record high of $2,865 per ounce as investors sought safety amid market uncertainty.
