TLDR
- Gold prices reached a historic all-time high of $3,317.90 per ounce on April 16, 2025
- Trade tensions between US and China fueled the gold rally, with Trump ordering a probe into critical minerals imports
- Markets reacted to Trump’s shifting tariff policies, including 145% duties on Chinese imports and potential semiconductor tariffs
- ANZ raised its year-end gold price forecast to $3,600 per ounce
- Gold has risen nearly 26% this year due to tariffs, central bank buying, expected rate cuts, and ETF flows
Gold prices soared to an unprecedented high of $3,317.90 per ounce on April 16, 2025, marking the fifth positive trading day in the last six sessions. The precious metal continued its upward trajectory amid growing concerns over US-China trade relations and shifting tariff policies.
The price surge represents a 1.87% increase in a single day and extends gold’s impressive year-to-date gains to nearly 26%. This rally has been fueled by several factors, including trade disputes, central bank purchases, anticipated interest rate cuts, and increased investment in gold-backed exchange-traded funds (ETFs).
Trade Tensions Drive Safe-Haven Demand
President Donald Trump’s recent policy announcements have created market uncertainty that appears to be driving investors toward gold as a safe-haven asset. Last week, Trump paused reciprocal tariffs for 90 days in what seemed to be a step back from his aggressive trade stance. However, this temporary measure still maintains 145% duties on many Chinese imports.
The situation escalated when Trump ordered a probe into potential new tariffs on US critical minerals imports. This move is widely seen as targeting China, the leading producer of critical minerals. Trump has also promised to unveil tariffs on imported semiconductors within the next week and threatened levies on pharmaceuticals in the future.
China responded by increasing its tariffs on US imports to 125% last Friday. These tit-for-tat measures have raised concerns about the potential impact on global economic growth, pushing investors toward traditional safe-haven assets like gold.
Market Response and Economic Indicators
The US dollar has weakened considerably, touching its lowest level since April 2022 last week. This decline reflects reduced faith in US policies and weakening confidence in the US economy. A weaker dollar typically benefits gold prices as it makes the metal cheaper for holders of other currencies.
Asian and European shares fell along with US stock futures after the US Commerce Department announced new export licensing requirements for Nvidia’s H20 and AMD’s MI308 artificial intelligence chips to China. Nvidia stated it expects to take a $5.5 billion hit as a result of these restrictions.
Despite these concerns, China’s economy showed strength in the first quarter, growing 5.4% year-over-year and exceeding expectations. Chinese retail sales, industrial production, and fixed asset investment also came in better than estimated, though these positive indicators were overshadowed by rising trade tensions with the US.
Expert Perspectives on Gold’s Rally
“Trump’s trade war shows no signs of easing… sparking a fresh move towards safe havens and out of stocks,” said Ole Hansen, head of commodity strategy at Saxo Bank. Hansen noted that while the rally has become “a bit unhinged,” previous corrections have been shallow with “underlying bids waiting on any setbacks.”
A recent Bank of America survey revealed that 73% of respondents believe that “US exceptionalism” has peaked, impacting markets. Furthermore, 49% now view “long gold” as the most crowded trade, overtaking bets on US tech giants for the first time in 24 months.
ANZ has raised its year-end gold price forecast to $3,600 per ounce and its six-month forecast to $3,500, reflecting a bullish outlook for the precious metal.
Technical Indicators and Future Outlook
Gold’s Relative Strength Index (RSI) on daily and 4-hour charts indicates the metal is in overbought territory, which might warrant caution for bullish traders. This technical indicator suggests that a period of consolidation or a modest pullback could occur before further price appreciation.
Ricardo Evangelista, senior analyst at brokerage firm ActivTrades, remains optimistic: “The fundamentals here are too strong, and I can’t really see another scenario different from the overall risk being tilted to the upside.”
Support levels for any corrective pullback might be found near $3,245 and $3,230 regions. However, analysts suggest that any decline would likely be seen as a buying opportunity, with strong support expected ahead of the $3,200 mark.
Investors are now looking forward to comments from Federal Reserve Chair Jerome Powell for more clues on the interest rate path. The Fed is expected to lower borrowing costs by 100 basis points in 2025, which would likely provide further support for gold prices.
Other precious metals also saw gains, with spot silver rising 2% to $32.94 an ounce, platinum up 0.1% to $960.85, and palladium gaining 0.6% to $977.09.
