Gold headed for $3,000

Gold broke short-term resistance at $2,900 per ounce, signaling a test of our $3,000 target. The precious metal advanced to $2,934 on the announcement of US tariffs on steel and aluminum. Uncertainty over the geopolitical outlook has increased volatility in global financial markets and demand for gold as a haven. Breakout above $3,000 would offer a medium-term target of $3,600.

From the WSJ:

President Trump announced 25% tariffs on imports of steel and aluminum to the U.S., reinstating global duties without exceptions for allies such as Canada, Mexico, Japan and South Korea that were relaxed by the Biden administration.

Central bank purchases of bullion increased to 333 tonnes in Q4 of last year, according to the World Gold Council, with uncertainty over the US presidential election boosting demand.

Silver also caught a bid, testing resistance at $32 per ounce, but lags gold.

Conclusion

Gold is headed for a test of $3,000 per ounce for the first time. Expect retracement to test new support at $2,900, but respect will likely confirm the advance to $3,000.

Breakout above $3,000 would offer a medium-term target of $3,600.

Uncertainty over US federal debt, long-term inflation, and geopolitical tensions drive demand.

Acknowledgments

• World Gold Council: Gold Demand

Colin Twiggs

Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.

Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.

Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.