Gold’s unstoppable rally breached 3,500perounceforthefirsttimeever∗∗asinvestorsfledtothemetalamidaperfectstormofpoliticalchaos,dollardistrust,andvoraciouscentralbankbuying.Thesurge—whichhasadded∗∗3,500perounceforthefirsttimeever∗∗asinvestorsfledtothemetalamidaperfectstormofpoliticalchaos,dollardistrust,andvoraciouscentralbankbuying.Thesurge—whichhasadded∗∗800 to gold’s price since January—reflects a seismic shift in global markets as President Trump’s renewed Fed attacks and trade wars accelerate a retreat from traditional assets.
Why Gold Is Defying Gravity
- Monetary Policy Crisis: Trump’s Monday broadside against Fed Chair Powell (“major loser”) sparked a Treasury selloff and dollar plunge, with gold’s appeal as a Fed-independence hedge soaring.
- Central Bank Stampede:
- Q4 2024 central bank purchases jumped 54% YoY to 333 tons (World Gold Council).
- China added to reserves for a 5th straight month and plans offshore gold warehouses to bypass dollar trade.
- Technical Momentum: Prices have set 28 record highs in 2025, including a $200 surge in just 4 days last week.
Market Reactions
- Spot Gold (XAU=): Peaked at **3,500.05/oz∗∗beforesettlingat3,500.05/oz∗∗beforesettlingat3,428—still up 31% YTD.
- Wall Street Upgrades: Goldman Sachs hiked its 2024 target to 3,700∗∗;ANZsees∗∗3,700∗∗;ANZsees∗∗3,600.
- Dollar’s Demise: The DXY index fell 4.5% YTD, amplifying gold’s appeal.
What’s Next?
- 4,000Horizon∗∗:Goldmanwarnssustainedcentralbankdemand(∗∗100+tons/month∗∗)couldpushgoldto∗∗4,000Horizon∗∗:Goldmanwarnssustainedcentralbankdemand(∗∗100+tons/month∗∗)couldpushgoldto∗∗3,810 by end-2025.
- Correction Immunity: Physical demand from ETFs and banks creates a price floor; dips are seen as buying chances.
- Election Wildcard: A “less confrontational Trump” on trade/Fed policy could cool rally—but analysts call this “unlikely” (Julius Baer).
The Big Picture
Gold’s rally signals a collapse in faith in fiat currencies and traditional safe havens. With Trump’s trade wars escalating and the Fed’s autonomy in question, the metal’s role as a geopolitical asset is cementing its record run.