Gold’s Record Run: Rate Cuts, Trade Tensions, and the Next Big Move

Gold continues to capture investor attention as it surges to record highs, driven by strong ETF inflows, central bank purchases, and growing expectations for Federal Reserve rate cuts. Geopolitical uncertainty, particularly around U.S.-China trade tensions, has further bolstered demand for the metal as a safe-haven asset. Meanwhile, Swiss gold exports to the U.S. have hit record levels amid tariff concerns, highlighting the shifting dynamics in the global bullion market. As traders assess the outlook for monetary policy and inflation, technical indicators suggest both upside potential and risks of a corrective move.

Gold surged to a fresh record of $2,956.10 an ounce as bullion-backed ETFs saw their biggest inflows since 2022, reflecting renewed investor interest. Concerns over President Trump’s trade and geopolitical policies, along with central bank purchases, are driving demand. Goldman Sachs raised its year-end target to $3,100. A weaker dollar and expectations of Fed rate cuts also supported prices. Traders now anticipate the first rate reduction in July. Meanwhile, the Fed’s preferred inflation metric, due Friday, is expected to show slowing price growth, though policymakers remain cautious on further cuts.

Switzerland’s gold exports to the US soared to a record 193 metric tons in January, surpassing all of 2024’s shipments, as traders rushed to secure metal ahead of potential tariffs. The surge, valued at over $18 billion, was driven by a sharp premium on Comex gold futures, which reached as high as $50 an ounce over London spot prices. To meet Comex delivery standards, gold had to be refined in Switzerland before shipment. Since the US presidential election, over 20 million troy ounces have entered New York’s Comex depositories, reflecting growing investor uncertainty.

Gold retreated from its fresh all-time high as investors took profits, with expectations rising for a Federal Reserve rate cut in July. Markets now price in easing two months earlier than previously anticipated, supporting bullion, which benefits from lower interest rates. Haven demand remains strong as President Trump’s latest trade actions against China increase geopolitical risks. Gold-backed ETFs have seen their largest inflows since 2022, fueling a 12% rally this year. Traders now await Friday’s core PCE inflation data for further clues on the Fed’s policy path.

Gold has retreated from its fresh all-time high of $2,956.10 after a nine-week rally, though price action remains above the 20- and 50-period Exponential Moving Averages, indicating sustained buying interest. Key momentum indicators reinforce this strength, with both the Momentum oscillator and the Relative Strength Index (RSI) holding above their respective baselines (100 and 50), while the RSI has entered overbought territory above 70.

However, a negative divergence between the Momentum oscillator and price action suggests a potential slowdown or corrective move. If bullish momentum persists, upside targets include $3,000, $3,199, and $3,609. On the downside, a break below key support at $2,916 and $2,892 could signal increased bearish pressure.

As gold continues to navigate a complex landscape of monetary policy shifts, geopolitical uncertainty, and strong investor demand, its near-term trajectory remains in focus. While record ETF inflows and central bank buying fuel bullish momentum, concerns over potential corrections and trade-related disruptions add caution to the outlook. With key economic data and Federal Reserve decisions on the horizon, traders will be closely watching price action and technical indicators for signs of the next major move in the gold market.