are climbing sharply this September, having broken through the previous all-time high of $3,500 and recently reaching around $3,540. The move reflects a combination of economic, monetary, and geopolitical influences.
Key Factors At Play
1. Anticipated Federal Reserve Rate Cuts
Markets now assign a near-90% probability to a from the US Federal Reserve in September. This shift in policy expectations has been one of the most significant short-term catalysts for gold.
2. Aggressive Central Bank Gold Buying
Central banks, particularly in China, India, and other emerging economies, are adding to their gold reserves at record levels. This sustained institutional demand is lifting the price floor. The key motivations include diversifying away from the , hedging against currency volatility, and reshaping reserve portfolios to reduce exposure to geopolitical risk.
3. Weakening US Dollar
Recent weakness in the has made gold more affordable for non-dollar investors, increasing global demand. This decline is being driven by expectations of looser monetary policy and political instability in the US. The resulting currency shift is adding upward pressure to gold prices.
4. Heightened Geopolitical Risk
Geopolitical uncertainty remains elevated. Ongoing conflict in Ukraine, renewed trade tensions, and tariff turbulence are all contributing to risk-off sentiment. Gold is benefiting from this environment as investors seek safe-haven assets during periods of instability.
5. Return of Investment Flows Into ETFs and Funds
ETF inflows reached $21.1 billion in Q1 2025, marking a reversal from the outflow trend seen in 2023 and 2024. Both institutional and retail investors are increasing their gold allocations, seeking protection from inflation, market volatility, and declining confidence in traditional asset classes.
Technical Insights and Outlook
- Gold has recently broken out above $3,400, the upper boundary of the symmetrical triangle that has contained price action since April 2022, when gold hit an all-time high at $3,500. $3,400 could now be seen as a primary support level. Holding above it would confirm the breakout, while a drop back below risks a false move and could re-open the lower range around $3,310-3,370.
- In recent trading, gold moved above the prior all-time high to $3,508 on 2 September, before climbing further to $3,540 on 3 September.
- Gold has now entered uncharted territory, with the next level to monitor for continuation of the bullish trend to $3,600. The $3,500 level remains a key psychological threshold to watch.
- Momentum appears stretched, with RSI above 80 on the 4-hour chart, a level last seen near the peaks in June and July. This increases the likelihood of short-term consolidation or a pullback before further upside, particularly as price has yet to sustain a move above $3,500.
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