- Gold (XAU/USD) has seen a significant rally, reaching $3500/oz, fueled by global uncertainties and Trump’s comments on the Federal Reserve.
- Gold ETFs are at high levels, but retail investor activity is still relatively low, suggesting potential for further gains.
- Technical analysis indicates overbought conditions, but dip buying is expected, with key support and resistance levels identified.
This is a follow-up analysis of our prior report “” published on 14 April 2025.
prices have rallied some $300 in the last 8 days, with the last two days bringing in around $170 of gain,s taking Gold to the psychological $3500/oz handle.
The rally continues to attract buyers as global uncertainties escalate, but comments by President Trump over the last few days regarding the Federal Reserve and its Chair Jerome Powell have introduced a new risk dynamic.
Trump repeated his demand for a quick cut in on Monday, saying the U.S. economy might slow down. He also criticized Powell for holding rates steady until the effects of Trump’s tariff plans on inflation become clearer.
In my humble opinion, could President Trump be setting up Chair Powell as the bad guy as it appears the tariff policy has not yet yielded the desired results yet? No deals announced and China continues to play hardball with the Trump administration keeping tensions at fever pitch.
Demand Remains High
Gold ETFs are at their highest levels since September 2023, and in dollar terms, they’re at a record high due to rising prices. Spot gold has climbed over 30% this year, making it the top-performing commodity.
Meanwhile, COMEX gold inventories have dropped by nearly 2 million ounces since early April, now standing at just under 43.1 million ounces. This decline partly reflects the impact of gold being excluded from tariffs, which has occasionally made shipping to New York less profitable.
If you take a closer look, there’s still a lot of potential in the ETF market despite its stellar performance. State Street’s gold fund is at a record high in asset value, but that’s mainly due to rising prices. The number of shares, which reflects retail investor activity, is still much lower than during the Covid panic.
What Does This Mean?
It signals that retail investors haven’t jumped in yet. This does bode well for Gold bulls who may be eyeing further gains for the precious metals while stoking interest in buying the dip as well. Both of which would be positive for Gold prices in the short-medium term.
Looking Ahead
It has become clear to me that markets are letting their feelings be known with the rally we are seeing in the precious metal. Is this a question of fiat credibility and a preference by market participants for something physical?
Well, there is a school of thought that would agree with that assumption, with some likening the current rally with the 1980 one, which occurred during an era of geopolitical tension and stagflation.
Either way, bulls are feasting right now, and with no end in sight to the rally there could be more in store. The only warning sign which could scupper the rally would be an announcement of trade deals from the Trump administration which could ease some of the market’s angst.
I will also be monitoring developments around Donald Trump’s attacks on Fed Chair Powell and whether this continues. This could also play a huge role in market sentiment moving forward.
Technical Analysis – Gold (XAU/USD)
From a technical analysis standpoint, Gold prices have retreated from the fresh all-time highs printed in the Asian session.
Looking at the four-hour chart below and the parabolic move since yesterday, saw no bearish four-hour candle with 10 successive green candles, a sign of the bullish momentum in play.
This morning’s drop seems to be mostly due to profit-taking, as there hasn’t been any real change in the tariff or Powell-Trump developments.
The period-14 RSI remains in overbought territory with today’s pullback still leaving it above the 70 mark. A break below 70 could signal a change in momentum but I still see risks skewed toward the upside and expect dip buying to continue.
Gold (XAU/USD) Four-Hour Chart, April 22, 2025
Source: TradingView
Support
Resistance