Gold prices hit $3,500, retreat due to profit taking and strong demand for safe havens
From Yahoo Finance: 2025-04-22 16:31:00
Gold prices reached over $3,500 an ounce before retreating as traders took profits amid a nearly 10% monthly increase. The surge came as equities bounced back, stabilizing bonds and the dollar. Gold’s 14-day relative-strength index is in overbought territory, signaling a potential end to the recent price rally.
Investors sought safe havens like gold, the yen, and the Swiss franc as concerns over President Trump potentially firing Fed Chair Powell led to a flight from US stocks, bonds, and the dollar. Trump’s calls for immediate interest rate cuts have raised fears of economic slowdown.
Gold has outperformed most major asset classes, surging 29% this year as investors flee equities due to trade war concerns. Central banks have been buying gold to diversify their foreign exchange holdings and ETF flows have increased. Analysts at Jefferies Financial Group Inc. see gold as the only true safe haven left.
Trading volumes on Chinese exchanges have surged, with gold trading at a premium. Banks like Goldman Sachs forecast gold could reach $4,000 an ounce next year. The rally shows a desire to diversify out of dollar assets into safe havens, according to Kamakshya Trivedi from Goldman Sachs.
Despite hitting a fresh all-time high, gold for immediate delivery traded 1.2% lower at $3,382 an ounce. Silver, platinum, and palladium also slipped. Analysts warn that while gold may be overbought in the short term, it performs best in times of economic distress, highlighting the current uncertainty in the global economy.
Read more: Gold Slides From $3,500 on Profit Booking After Rally to Record