Gold Prices May Hit a New Record Soon – Here’s Why
Gold prices are moving up again, and some experts think
they could soon reach a new highest price ever. Analysts from Citi bank, led by
Maximilian Layton, have increased their short-term prediction for gold. They
now believe gold could reach $3,500 per ounce within the next three months, and
possibly even touch $3,600. This is higher than their earlier forecast of
$3,300.
Right now, they expect gold to stay between $3,300 and
$3,600 per ounce for the next few months.
Main Reasons Why Gold is Rising
1. Weak U.S. Economy and Higher Tariffs
The U.S. economy is slowing down. At the same time, new
tariffs (extra taxes on imported goods) are making prices rise. For example,
the U.S. has added a 39% tax on some goods from Switzerland. This can cause
inflation to stay high. When inflation goes up, gold often becomes more
attractive because people see it as a safe place to store value.
2. Concerns About the U.S. Federal Reserve
The Federal Reserve (the U.S. central bank) is supposed
to be independent, but some investors are worried that politics might be
influencing it. There are changes happening in leadership at both the Federal
Reserve and the Bureau of Labor Statistics. Some people think these changes
could affect how interest rates and inflation data are managed. When trust in
the central bank is low, more people buy gold.
3. A Weak U.S. Dollar
The U.S. dollar has fallen by almost 9% this year. This
makes gold cheaper for buyers in other countries who use their own currencies.
A weaker dollar usually helps gold prices go up because more people around the
world can afford to buy it.
4. Soft U.S. Jobs Data and Possible Interest Rate Cuts
Recently, U.S. jobs reports have shown fewer new jobs
than expected. This makes it more likely that the Federal Reserve will cut
interest rates in September. Lower interest rates make gold more attractive
compared to investments like bonds, which would pay less interest.
Gold’s Performance in 2025
So far in 2025, gold prices have increased by nearly 30%.
Right now, gold is trading around $3,436 per ounce. Earlier this year, in
April, gold briefly touched $3,500, and in June it closed at a record high
settlement price of $3,452.80.
Why Analysts Think the Trend Will Continue
Citi analysts believe that the combination of a weaker
economy, rising inflation from tariffs, concerns about the Federal Reserve, and
a weak dollar will keep pushing gold higher. They think gold has a good chance
of breaking past its old record and setting a new one in the second half of
2025.
Technical Levels to Watch
From a chart-watching (technical analysis) point of view,
gold is forming a shape called an ascending triangle, which often signals more
upward movement. The key level to break is $3,435. If gold moves above that, it
could jump to $3,735. On the other hand, strong support (a level where prices
might stop falling) is around $3,245–$3,150.
Summary – Why Gold Could Make History Soon
Gold prices are rising for several connected reasons:
- Slowing
U.S. economy – makes people nervous about the future.
- High
tariffs – raise costs, causing inflation, which supports gold.
- Weak
dollar – makes gold cheaper for overseas buyers.
- Worries
about the Fed – lead people to seek safer investments.
- Possible
rate cuts – make non-interest investments like gold more attractive.
With these forces working together, Citi now sees gold
trading between $3,300 and $3,600 soon. If the situation continues, gold could
move well above its old record high.
Source- Market Watch
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