GOLD Analysis
Afternoon: Gold Price Retreats Amid Stronger Dollar and Fed Uncertainty
Highlights:
- Gold retreated after peaking at $3,057/oz as the US dollar strengthened, creating a headwind for the metal.
- Macquarie Group projects gold could reach $3,500/oz, while ETFs cut 32,302 troy ounces from holdings despite overall growth.
- Federal Reserve maintains interest rates, forecasting slower growth and higher inflation, while Trump pushes for rate cuts.
Overview:
Gold prices experienced a brief retreat after reaching a peak of $3,057 per ounce, primarily due to a strengthening US dollar. The precious metal has seen a remarkable 16% gain year-to-date, hitting a series of all-time highs as investors continue to seek safe-haven assets.
The Federal Reserve's recent policy stance, which includes maintaining interest rates while acknowledging economic uncertainty due to President Donald Trump’s trade policies, has further influenced market sentiment. Additionally, major financial institutions, including Macquarie Group, predict gold could climb to $3,500 per ounce, reinforcing bullish expectations.
Impact of the Federal Reserve Decision
- The Federal Reserve kept interest rates unchanged in its latest policy meeting.
- The central bank expects slower economic growth and higher inflation this year.
- Fed officials still anticipate a 50 bps rate cut later in 2025.
- Trump has urged the Fed to lower borrowing costs, adding political pressure to monetary policy decisions.
While the Fed acknowledges economic risks, its current stance suggests a cautious approach to rate cuts, which may slow gold's upward momentum in the short term.
ETF and Institutional Movements
- ETFs reduced gold holdings by 32,302 troy ounces in the last session, equivalent to $98.5 million at the current spot price.
- Total ETF gold holdings have risen 4.9% in 2025, reaching 87 million ounces.
- The SPDR Gold Shares fund (largest gold ETF) held steady at 29.2 million ounces, with a market value of $88.9 billion.
- Silver ETFs also cut 655,548 troy ounces, bringing net sales to 1.15 million ounces this year.
Despite a minor reduction in holdings, ETFs continue to support gold's upward trajectory, signaling ongoing institutional confidence in the metal.
Technical & Market Outlook
- Key Resistance: $3,100 - $3,150 per ounce
- Support Levels: $3,000 - $2,950 per ounce
- Short-Term Sentiment: Volatile, but remains bullish
- Long-Term Outlook: Bullish trend remains intact, with major financial institutions predicting further upside in gold prices.
China’s financial media has urged caution, suggesting that gold prices may face increased volatility. However, as long as economic uncertainty persists and central banks lean toward easing policies, gold remains an attractive investment.
Conclusion
The gold market remains in strong bullish territory, supported by safe-haven demand, inflation concerns, and potential rate cuts. While the recent price retreat was driven by a stronger US dollar, underlying fundamentals remain intact for further upside, with Macquarie's forecast of $3,500 per ounce highlighting continued institutional optimism.
Support & Resistance Levels:
