Gold Surges Past $3,056 as Fed Signals Rate Cuts—How High Can It Go?
Gold prices soared to a fresh record high on Thursday, with XAU/USD trading near $3,056, as the Federal Reserve reinforced expectations of two potential rate cuts this year.
With global uncertainties, including geopolitical risks and trade tensions, investors are flocking to gold as a safe-haven asset.
Federal Reserve Chair Jerome Powell confirmed the central bank’s decision to keep rates steady at 4.25%-4.50%, but policymakers anticipate two quarter-point cuts by late 2025. Historically, lower interest rates boost gold’s appeal as it becomes a more attractive alternative to yield-bearing assets.
Meanwhile, the U.S. dollar remains weak, further supporting gold’s momentum. Dick Poon, general manager at Heraeus Metals Hong Kong Ltd., noted that market uncertainty, rate cut expectations, and ongoing geopolitical tensions are fueling bullion’s rally.
Gold’s remarkable rally has seen 16 record highs in 2025, with four of them above the crucial $3,000 milestone. Traders are now watching whether the momentum will push gold toward even higher levels.
Geopolitical and Economic Uncertainty Fuel Safe-Haven Demand
Beyond interest rate speculation, global economic policies and geopolitical risks continue to strengthen gold’s bullish case. U.S. President Donald Trump’s renewed tariffs on imports have raised concerns about inflation, adding another layer of uncertainty to the market. Powell highlighted that these tariffs could slow U.S. economic growth and contribute to inflationary pressures.
Meanwhile, Middle East tensions have re-escalated, prompting investors to seek safe-haven assets. Reports indicate that Israeli military operations in Gaza have intensified, raising concerns about prolonged instability.
Christopher Wong, an FX strategist at OCBC, emphasized gold’s role as both an inflation hedge and a geopolitical risk hedge, reinforcing its long-term strength.
At the same time, some analysts are warning of potential corrections. Nicholas Frappell, global head of institutional markets at ABC Refinery, suggested that after gold’s strong performance in Q1, a short-term pullback wouldn’t be surprising. However, long-term sentiment remains constructive, with institutional demand continuing to rise.
Technical Outlook: Gold Targets New Highs Above $3,072
Gold’s uptrend remains intact, trading at $3,056 and holding above key support levels. The price action is firmly positioned within an ascending channel, reflecting strong bullish momentum.
Immediate resistance: $3,060
Next resistance levels: $3,072 and $3,086
Key support: $3,045
Next support levels: $3,025 and $3,010
The 50-day EMA at $3,013 serves as strong dynamic support, ensuring that pullbacks remain limited. If gold breaks above $3,060, traders anticipate a move toward $3,100.
Investor sentiment remains bullish, with safe-haven demand driving fresh buying interest. As long as gold remains within its current upward channel, the outlook favors continued gains. However, if prices drop below $3,045, a short-term correction could test lower support levels.
Will Gold Break $3,100?
With expectations of Fed rate cuts, continued geopolitical risks, and inflation concerns, gold’s bullish trajectory appears strong. However, traders are closely monitoring resistance at $3,060-$3,072 for confirmation of further upside.
If gold sustains momentum, the next psychological target will be $3,100, a level that could attract further institutional inflows. For now, all eyes remain on macroeconomic cues and investor sentiment, as gold continues its record-breaking rally.
ABOUT THE AUTHOR
See More
Sidebar rates
Add 3442
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals