Gold prices held firm above the $3,350 per ounce mark on Wednesday, as escalating trade tensions and weak U.S. employment data drove investors toward safe-haven assets. At 10:30 AM ET, spot gold rose 0.6% to $3,372.70, while New York gold futures gained 0.5% to trade at $3,395.10. The U.S. dollar index fell roughly 0.4%, adding further support to the metal’s recent rally.
This latest upward move reflects growing investor caution as the U.S. private sector recorded its weakest monthly job growth in years. The disappointing data intensified speculation over potential Federal Reserve rate cuts, particularly following fresh pressure from President Trump for more accommodative monetary policy. The ongoing U.S.-China trade standoff remains a key source of market anxiety, with Trump describing China as “extremely tough” in negotiations.
May 2025: A Volatile but Net-Stable Month
According to a monthly report by global broker Octa, gold (XAUUSD) saw a turbulent but directionally muted performance in May. Prices fluctuated between $3,120 and $3,435 per ounce, yet ended the month relatively unchanged—just barely extending a five-month winning streak. Despite falling nearly 9% mid-month due to improved global risk sentiment and easing trade tensions, gold found solid support near $3,200 before rebounding.
Notably, the monthly candlestick for May formed a prominent doji—a technical indicator often associated with market indecision and possible trend reversals. Still, gold maintained its long-term bullish structure by holding above its 50-, 100-, and 200-day moving averages.
Key market-moving events in May included:
5–6 May: XAUUSD surged over 6% following increased Chinese demand post-Labour Day and renewed U.S. trade threats.
12 May: Gold plunged 3% after the U.S. and China announced a temporary trade deal.
15–20 May: A bounce from technical support and softer U.S. PPI data fueled recovery.
23–29 May: New U.S. tariff threats and a court decision reinstating tariffs led to another rally.
“May was a wild ride,” noted Kar Yong Ang, market analyst at Octa. “Erratic trade policy and shifting Fed expectations created a choppy but ultimately constructive environment for gold.”
June 2025: A Critical Inflection Point?
Heading into June, investors are cautiously optimistic. Gold has surged nearly 28% year-to-date, currently hovering just $150 shy of its April all-time high of $3,500 per ounce. With the macroeconomic landscape in flux, analysts are watching three major factors:
1. Geopolitical Uncertainty
Multiple regional conflicts—from Israel-Hamas tensions to Russia-Ukraine—continue to drive demand for safe-haven assets. Additionally, the looming 8 July U.S. tariff deadline adds further uncertainty. While some cease-fire negotiations are underway, any progress could temporarily weaken gold as risk appetite returns.
2. Monetary Policy Shifts
Markets are increasingly pricing in global rate cuts. The Fed is expected to reduce rates by 75 basis points by year-end, with the ECB and BoE also forecast to loosen policy. This dovish shift is generally bullish for gold, which offers no yield but gains when opportunity costs decline. However, stubborn inflation remains a key risk. “If inflation persists, the Fed may hold off,” warns Ang.
3. Physical and Institutional Demand
China remains a strong buyer, with April imports via Hong Kong nearly tripling to 58.61 metric tons, and the PBoC adding gold to reserves for a sixth straight month. Global central banks added more than 240 tons to their reserves in Q1 2025. Meanwhile, flows into gold ETFs have shown signs of slowing, and large speculators are cautiously trimming net-long positions on COMEX.
Still, many investors continue to rotate out of U.S. assets amid rising fiscal concerns. As Ole Hansen of Saxo Bank explains, “Structural risks like trade protectionism and political polarization are shifting capital away from U.S. equities and Treasuries into gold.”
Technically, Hansen sees a bullish breakout underway. Former resistance at $3,325 has turned into support, while key targets for bulls now include $3,397, $3,438, and the $3,463–3,471 zone. The 55-day moving average, currently at $3,223, provides a deeper support level.
Diverging Views on Future Highs
While momentum favors the bulls, some analysts urge caution. Carley Garner of DeCarley Trading views the April peak of $3,500 as a possible near-term ceiling, citing overbought signals in both gold and related assets like Treasuries. “The rapid rise raises risks of a pullback,” she warned.
Octa’s Ang echoed that sentiment: “Gold is still a buy, but no longer a screaming buy. Some consolidation may be due before the next leg up.”
Conclusion
With the Federal Reserve and six other central banks set to deliver key rate decisions in June, along with continued volatility in global trade negotiations, this month could shape the direction of gold for the rest of 2025. While fundamentals remain broadly supportive, investors should brace for potentially sharp swings as the macro landscape evolves.
Related topics:
- India Surpasses China in Gold Purchases, Buying 51% More in Three Months
- Qilu Bank Enhances Support for Small Businesses with Innovative Financial Tools
- Bitcoin Poised for a Surge Amid Gold’s Delivery Delays, Expert Claims
