Gold continues to trade just shy of the all-time highs hit on Friday and again yesterday. Investor appetite for seeking out safe havens remains strong. This is understandable given the Trump administration’s eccentric tariff measures against its trading partners, which have now evolved into an outright trade war with China.
The recent erratic moves in US Treasuries, along with the persistent US dollar sell-off, have diminished the standing of both as obvious places in which to park funds during market disruptions. This means that gold has maintained, or even increased, its attractiveness for investors, despite trading at overbought levels, according to its daily MACD.
Source: TN Trader
Interest in gold is growing, with commentators ready to rush out with analysis to justify price targets of $4,000 or even $5,000 per ounce. Can gold get there? Maybe. But it’s unlikely to rally to such dizzying levels in a straight line.
This is not to suggest that it can’t make further gains from current levels. Rather, it’s to express the need for caution given the size and length of the rally to date. There will be a significant pullback at some stage.
It is the nature of that pullback which will help decide whether gold’s rally is complete, or if there’s more upside to come. Meanwhile, silver was little-changed in early trade and, unlike gold, remains well below its all-time high just shy of $50, from April 20211.
