- summary:
- The price of gold is off to a strong start in 2025 and is only 1.2 percent below its record highs. Could the impending tariff war do the trick?
The price of gold continued its rise on Wednesday, rising to the highest level since November 1. The commodity was trading at $2,727 at the time of writing this report, recording its third daily gain in a row, bringing its gains in 2025 to 5 percent. Concerns about the impact of US tariffs on the dollar’s strength have kept the yellow metal on the upside in recent days.
Can the price of gold break its record highs?
At its current price, gold is 1.2% below its all-time high, and a continuation of its current momentum will likely see it surpass this level in the coming days. US President Donald Trump threatened to impose trade sanctions on China, Mexico, Canada, and the European Union in the range of 10% to 25%, starting in February.
The prospect of retaliation has raised the risk premium on gold prices amid rising safe-haven demand. Also, investment buying of the metal is likely to help guide strong near-term demand as Treasury yields remain weak.
However, gold’s geopolitical risk premium is likely to decline significantly in 2025. Israel and Hamas recently signed a ceasefire agreement, while US President Donald Trump reiterated his intention to seek a peaceful end to the wars in which the country is involved. This could potentially ease hostilities between Ukraine and Russia.
Gold price forecast
Gold price is trading at $2,752, and a move above this level will help buyers take control. This is likely to move the price of the commodity to the first resistance level at $2,763. However, if buyers expand their control, this could enable a breakout of this barrier and possibly push it to test $2,770.
Alternatively, a move below the $2,752 level will consolidate sellers’ control. If that happens, XAUUSD will likely find initial support at $2,743. The bullish narrative will be invalid if the pair loses this support. This could also pave the way for a test of the second support at $2,730.
