Gold starts 2025 with strong momentum after posting its best annual performance since 2010, with analysts projecting further gains amid expected rate cuts, geopolitical tensions, and sustained central bank buying.
Market Dynamics
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Open real account TRY DEMO Download mobile app Download mobile appFollowing a 27% gain in 2024, gold prices have kicked off 2025 with renewed strength, reaching their highest level since mid-December. The rally comes despite fund traders reducing net long positions to six-month lows, suggesting potential for further upside as positioning rebuilds.
Major investment banks including JPMorgan, Goldman Sachs, and Citigroup share a bullish $3,000 price target for 2025, citing multiple supportive factors.
Fundamental Drivers
Analysts highlight several catalysts supporting higher gold prices:
- Expected Fed rate cuts reducing the opportunity cost of holding non-yielding assets
- Growing geopolitical tensions including Middle East conflicts and Trump's trade policies
- Continued central bank buying, particularly from emerging markets
- Potential reallocation from $6.7 trillion money market funds as yields decline
Asian Demand
Chinese buyers have emerged as a key source of support, seeking safe-haven assets amid domestic property market weakness and yuan depreciation. This demand has helped gold maintain strength despite historically challenging conditions of dollar strength and elevated yields.
Gold (Interval D1)
The price broke above the 100-day SMA yesterday, which coincided with the 38.2% Fibonacci retracement level, and it is currently trading near the 50-day SMA. For bulls, the key level is the 23.6% Fibonacci retracement level, which has previously triggered two fake breakouts followed by corrections. This time, however, the momentum appears to favor bulls.
The RSI is showing signs of bullish divergence, aligning with a recent bullish crossover on the MACD, which may indicate growing upward momentum. These technical signals suggest potential for a bullish breakout if the key resistance is overcome. Source: xStation
