Gold Advances to the Rally Finals

Gold prices have surged by 1.9% to $3,042 per troy ounce, setting new record highs five times in the past six days. The latest all-time high of $3,057 per ounce was reached following last week’s U.S. inflation data release. Consumer prices declined to 2.8% YoY in February from 3.0%, the lowest level since November 2024, while the Producer Price Index dropped to 3.2% YoY from 3.7%, signalling further potential inflation cooling.

Meanwhile, trade tensions have eased, at least temporarily. After the European Union retaliated against U.S. tariffs on steel and aluminium, President Donald Trump threatened to impose 200% tariffs on European alcohol. However, no further escalation has occurred, leaving gold as one of the few assets continuing to rally. Prices broke through the key psychological resistance level of $3,000 per ounce last Friday and have maintained upward momentum this week, despite a minor pullback on Thursday.

Geopolitical risks are also driving demand. Israel has resumed airstrikes on Gaza, the United States has launched attacks against Houthi forces in Yemen, and the tentative Russia-Ukraine ceasefire over energy infrastructure appears to be faltering. These factors continue to push gold prices higher. Having cleared the $2,950–2,970 resistance last week, gold is now testing the $3,050–3,070 range. A decisive break above this level would set the stage for a move towards extreme upside targets at $3,150–3,250 per ounce.

Large investors are increasing their exposure to gold. The SPDR Gold Trust (GLD) saw massive net inflows of $1.15 billion last week, reversing the previous week’s $234.8 million outflow. Such a significant bet on gold was last seen in early 2025, a period that preceded a 16.0% price surge.

The rally appears to be entering its final phase, supported by central bank activity and Federal Reserve policy signals. In addition to continued gold purchases by the People’s Bank of China, the Fed hinted at a monetary easing shift this Wednesday. Chair Jerome Powell reassured markets that any inflationary impact from tariffs would be short-lived and that recession risks remain low. Despite market volatility, the Fed still plans at least two interest rate cuts this year.

Investors responded positively to Powell’s remarks. U.S. 10-year Treasury yields fell from 4.30% to 4.23%, and the S&P 500 index reversed its losses, resuming its climb. This is a strong signal for further gold accumulation. Investors added to GLD $82.4 million on Monday and Tuesday. While the amount may not seem large, the trend is clear—gold remains in high demand.