Gold prices touched all time high at $3,500 during the Asian session but selling was witnessed at the highs. As traders booked profits, the rally in Gold was met with sharp selling. Gold wasn't able to find support and witnessed breakdown for multiple support levels during the trading session. While the London session was met with buying at lower levels, the prices started drifting below $3,400 during the New York trading session. The rally in gold has been impressive during April and gold has witnessed strong upward momentum. A correction was expected but overall long term trend still looks positive. For short term, the trend has turned cautious and we could see lower levels during the week.

Gold Shines Brightest: Price Soars Past $3,500 as Global Uncertainty Deepens

Gold has once again asserted its status as the ultimate safe haven. On April 22, 2025, the precious metal reached a historic high of $3,500 per ounce, marking an explosive 30% rally since the beginning of the year. Investors around the globe have sought refuge in gold amid a perfect storm of geopolitical tension, monetary policy uncertainty, currency weakness, and mounting fears of inflation and stagflation. With central banks stepping up their accumulation and equities losing steam, gold appears to be at the center of the global capital preservation strategy.

US-China Tensions Fuel a Rush to Safety

One of the most immediate catalysts for the surge has been the escalation in trade hostilities between the United States and China. A new round of reciprocal tariffs and diplomatic friction has unnerved global markets, creating an environment where safe-haven assets thrive.

Investors are exiting riskier equities and turning to gold as a hedge against unpredictable geopolitical events. The ongoing uncertainty has not only dampened global trade sentiment but also raised concerns about supply chain disruptions and global growth slowdown.

Dollar Weakness Amplifies Gold’s Appeal

Another significant contributor to the rally is the persistent decline of the US dollar, which recently hit a three-year low against a basket of major currencies. For international buyers, a weaker dollar effectively reduces the price of gold, spurring demand and tightening global supply.

This inverse relationship between the dollar and gold remains one of the key drivers of the metal’s bullish trajectory. As long as the greenback remains under pressure, gold is expected to benefit from enhanced international interest.

Political Volatility and Federal Reserve Friction

Markets have also been rattled by growing political interference in monetary policy. President Trump’s pointed criticism of Federal Reserve Chairman Jerome Powell—and open discussions about his possible dismissal—have thrown US policy independence into question.

The resulting erosion in confidence around US monetary policy has undermined investor trust in traditional financial instruments, adding yet another tailwind for gold. The perception of institutional instability has driven institutions and retail investors alike toward the metal’s historical role as a store of value.

Central Banks Lead the Charge

Supporting this rally from the bottom up is relentless demand from global central banks. Data suggests that monetary authorities are collectively acquiring more than 100 tonnes of gold per month, a trend that shows no sign of reversing.

From emerging economies diversifying reserves to developed nations hedging against macroeconomic risks, the buying spree provides a fundamental floor for prices. This institutional endorsement is crucial in explaining both the momentum and resilience of gold’s recent upward move.

Equity Market Volatility Increases Safe-Haven Demand

A sharp selloff in global equity markets has further cemented gold’s appeal. Wall Street’s recent 2.4% plunge was the latest in a string of red sessions, reflecting concerns about overvaluation and tightening liquidity.

As traditional risk assets falter, gold has become the asset of choice for capital preservation. The psychological safety of gold during volatile periods—especially for institutional portfolios—cannot be overstated.

Inflation Worries and the Specter of Stagflation

Beyond geopolitics and market sentiment, fundamental economic concerns are fanning the flames of gold’s rally. The specter of rising inflation paired with slowing growth—commonly referred to as stagflation—has alarmed economists and investors alike.

Gold, historically viewed as an inflation hedge, has benefited from this renewed fear of eroding purchasing power. With core inflation metrics in both the US and Europe climbing steadily, precious metals have surged back into the spotlight.

Outlook: Can the Rally Continue?

Gold has now posted 28 new record highs in 2025 alone, with 16 of those exceeding the $3,000 threshold. The velocity and consistency of this climb suggest strong underlying demand and broad-based support.

Technical analysts highlight support at $3,450 and $3,400, with the next logical psychological resistance sitting at $3,600 per ounce. Goldman Sachs has raised its year-end forecast to $3,700, while other institutional forecasts suggest levels as high as $3,810—assuming central bank demand remains robust and geopolitical instability continues.

Market watchers warn that any dip may be fleeting as buyers consistently step in on corrections, preventing sustained retracements.