Gold Prices Experience Minor Drop Amid Profit-Taking and Geopolitical Tensions
Market Analysts Remain Bullish Despite Short-Term Corrections
Gold prices experienced a slight decrease on Friday as investors engaged in profit-taking before the weekend following a significant rally in recent weeks. As of 08:59 a.m. ET (1259 GMT), spot gold prices were recorded at $3,034.02 per ounce, reflecting a 0.3% drop. Meanwhile, US gold futures saw a minor decline of 0.1%, trading at $3,040.90 per ounce, according to a report by Reuters.
Despite this pullback, gold is poised to register its third consecutive weekly gain, having surged 1.7% over the week. The metal had recently reached record levels in 2025, peaking at an all-time high of $3,057.21 per ounce on Thursday.
Geopolitical Uncertainty and Anticipated Rate Cuts Fuel Gold’s Demand
Several factors are contributing to the ongoing strength and interest in gold. Analysts highlight the persistent geopolitical uncertainties and speculated monetary policy adjustments by the US Federal Reserve as pivotal drivers of demand for the precious metal.
Peter Grant, Vice President of Zaner Metals, stated, “Investors are booking some profits ahead of the weekend. Nevertheless, gold’s safe-haven demand continues to be firm on account of ongoing trade uncertainties and geopolitical tensions." This sentiment is exacerbated by US President Donald Trump’s intent to impose new reciprocal tariff rates effective April 2, which has further increased economic apprehensions among investors.
Additionally, heightened tensions in the Middle East, particularly Israel’s intensifying military campaign against Hamas in Gaza, continue to bolster gold as a hedge against uncertainty.
A Bullish Outlook Despite Short-Term Declines
While the recent price drop may seem concerning, market analysts suggest that any retracement in gold prices should be viewed as a potential buying opportunity. The focus now shifts towards next week’s US core Personal Consumption Expenditures (PCE) Price Index, an essential indicator of inflationary pressures.
Despite reassurances from Fed Chair Jerome Powell that the central bank is not in a rush to enact rate cuts, predictions still support the expectation of at least two cuts before the year’s end. As concerns over stagflation, largely driven by Trump’s trade policies, continue to loom, gold’s reputation as an effective hedge against inflation remains intact.
Technical Analysis: Key Price Levels to Monitor
From a technical standpoint, gold prices are currently trading within an ascending triangle breakout pattern, hinting at potential upside. However, analysts warn that a short-term dip could be on the horizon, particularly as the 14-day Relative Strength Index (RSI) hovers near 70.50, indicating overbought conditions.
Should selling pressure escalate, gold could see support levels tested at the following points:
- Wednesday’s low of $3,023
- Psychological support at $3,000
- Weekly low of $2,982
- Stronger support at $2,945, aligning with the 21-day Simple Moving Average (SMA)
On the upside, renewed buying interest could propel gold prices toward:
- The record high of $3,056
- A potential breakout target of $3,080
Wider Precious Metals Market Faces Pressure
The broader market for precious metals also felt the effects of profit-taking on Friday. Silver contracted by 1.4%, trading at $33.08 per ounce; platinum declined by 1% to $974.90; and palladium edged down 0.6% to $946. Despite these losses across other metals, gold remains a favored asset among investors maneuvering through economic fluctuations and global uncertainties.
Upcoming Economic Events to Watch
In the coming days, the financial markets will be attuned to several significant events, including:
- Speeches from US Federal Reserve officials, including Chicago Fed President Austan Goolsbee and New York Fed President John Williams.
- President Trump’s scheduled Oval Office address, which may provide further clarity on impending tariff decisions.
- Developments in Russia-Ukraine ceasefire discussions that could influence safe-haven demand.
As various economic and geopolitical elements continue to interact, traders remain cautiously optimistic about gold’s future trajectory, anticipating further gains in the months ahead.
FAQs
What is spot gold?
The spot price of gold denotes its current market value for immediate purchase or sale at a specific location and time, serving as a benchmark for gold trading globally.
Is spot gold trading legal?
Spot gold trading is legally available to residents of the United States, with the exception of those living in Arizona, Montana, New Hampshire, and Rhode Island. Approval for trading permissions may take up to 24 hours.
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