Gold races to $3,000, but analysts say it still has fuel in the tank

(Kitco News, Mon. March 17th, 2025) – Gold investors celebrated this weekend as the precious metal ended the week after touching a milestone record high above $3,000 an ounce.

Although gold has backed down from its record high early Friday morning, some analysts have said it can still move higher in the near term, while others see lower gold prices on expected profit-taking.

“I see this as just a pause at a major resistance and psychological level,” said Jesse Colombo, an Independent Precious Metals Analyst and author of The Bubble Bubble Report on Substack. “Right now, the trend is firmly up, and I expect another attempt to breach $3,000, probably next week.”

Commodity analysts at TD Securities noted that gold’s test of the $3,000 level would mark its third most significant bull market in modern history. They added that while risks are growing in the marketplace, the rally is not done yet.

“Macro funds still have scope to add to their purchase, but their wallets are not infinitely deep. Still, the cards are stacked for the bigger-picture macro setup to persist in the medium term,” the analysts said in a note.

James Stanley, Senior Market Strategist at Forex.com, said that with these blue-sky breakouts, it’s difficult to predict how far prices can go before profit-taking induces a larger selloff.

However, he noted that even at $3,000, momentum indicators are not overstretched compared to previous breakouts. He pointed out that during gold’s initial drive above $2,000 an ounce in 2020, the precious metal’s Relative Strength Index (RSI) was above 80 points. Stanley explained that gold’s consolidation in the final months of 2024 helped keep the market from overheating.

“I don’t know how much further gold has to go, but I do think there is some gas left in the tank,” he said. “I wouldn’t want to straight fade this market right now because it could power through; it could run for a little while above 3k.”

Although gold has room to move higher, Stanley said he would like to see some consolidation in the next few weeks. He added that the risk is that gold prices continue to move higher and trigger a mass exodus.

Some analysts have warned that gold’s rally to $3,000 an ounce is similar to the 2011 rally to the then-all-time high above $1,900. The market then sold off significantly as investors took profits after a three-year rally.

However, some analysts note that a key difference between now and 2011 is that economic uncertainty is just beginning. At the same time, ongoing geopolitical turmoil continues to support gold as an important safe-haven asset.

While gold is trading near all-time record highs, the broader equity market flirts with correction territory. The S&P 500 Index is ending the week with a 2.4% decline. The index is down more than 5% so far this year. Meanwhile, gold prices are up nearly 13%.

Colombo noted that weaker equity markets could continue to support gold’s rally.

“Capital rotation from equities to gold has just started in a big way, which will provide rocket fuel for gold’s bull market for years to come,” he said.

Analysts note that gold-backed exchange-traded funds are starting to see significant inflows as levels remain well below the peak set in 2020.

“Gold’s historical role as a safe haven makes it a preferred asset amid ongoing geopolitical tensions and economic uncertainty,” said Alex Tsepaev, Chief Strategy Officer at B2PRIME Group. “The increasing inflows into gold funds are largely driven by concerns over potential disruptions in global trade due to escalating tariff disputes, as well as conflicts we see now.”

“Institutional demand, including ETF inflows and record central bank purchases, has further supported gold’s price momentum, with a break above the psychologically significant $3,000/oz level potentially paving the way to $3,200/oz,” he added.

Looking to this week, some analysts have said that gold could see another leg higher if markets get dovish comments from the Federal Reserve following this week’s monetary policy meeting.

The U.S. central bank has struck a neutral tone since the start of the year, but some economists have said that deteriorating economic data and fears of a recession could prompt it to take a more dovish stance.

Currently, markets are pricing in at least two rate cuts this year.

“Donald Trump’s aggressive tariff stance is weighing on the economic outlook, denting growth forecasts and pressuring risk assets such as stocks, with major indices erasing post-election gains,” said Ricardo Evangelista, Senior Analyst at ActivTrades. “Meanwhile, softer-than-expected U.S. inflation data released earlier this week signals a growth slowdown for the world’s largest economy, fueling expectations of further Fed rate cuts. With risk appetite fading and the so-called ‘Trump Trade’ unraveling, gold may have further upside.”
“Next week’s FOMC meeting will be key in shaping expectations for Fed policy,” he added. “This is likely to be a key driver for gold, given its inverted correlation with the U.S. dollar.”

Economic data to watch this week:

Monday: US Retail Sales, Empire State Manufacturing Index
Tuesday: US Housing Starts and Building Permits, Bank of Japan monetary policy decision
Wednesday: Federal Reserve monetary policy decision
Thursday: Swiss National Bank monetary policy decision, Bank of England monetary policy decision, US weekly jobless claims, Philly Fed Manufacturing Survey, US Existing Home Sales.

Posted by:

Jack Dempsey, President

401 Gold Consultants LLC

jdemp2003@gmail.com