Investors take advantage of every drop to buy stocks.
Gold prices broke new record highs this week as they edged closer to $3,000 an ounce, fueled by tariff concerns and strong demand, according to Gary Wagner, editor of TheGoldForecast.com.
In a recent interview with Kitco News, Gary Wagner noted that gold’s recent rally comes after the precious metal dropped to around $2,650 an ounce — a level he had previously predicted. Wagner said the rally was “a new leg after the previous correction.”
Traders are actively buying whenever gold prices fall, he said, indicating a very optimistic market sentiment. After the testimony of US Federal Reserve Chairman Jerome Powell, "gold prices fell, but traders immediately jumped in to buy. They wait for such declines to take advantage of the buying opportunity," Wagner said.
According to Wagner, US President Donald Trump's imposition of 25% tariffs on steel and aluminum has increased inflation risks, increasing demand for safe haven gold. "The tariffs raise the risk of re-inflation," Wagner said.
Important psychological thresholds and adjustment capabilities
Gold prices are now approaching the psychologically important $3,000 an ounce mark. “Round numbers like $1,000, $2,000 or $3,000 an ounce are always important psychological thresholds,” Wagner said.
He believes that gold reaching $3,000 an ounce is just a matter of time: "It's not if, but when. And I think it will happen soon."
Despite the strong uptrend in gold, Wagner acknowledged the possibility of a correction. However, he noted that “there have never been two consecutive down days” in this rally, suggesting that the momentum remains strong.
Wagner also pointed out that the current trend of gold is almost “parabolic” (parabolic curve), which usually suggests a strong correction. But this time, he said, is different from previous rallies: “Usually, we would see a correction sooner, but this time, the fundamentals supporting gold prices are still very strong.”
Meanwhile, Jim Wyckoff - senior analyst at Kitco - said that those betting on gold prices to increase in the April futures contract are still dominating the market.
"The reason is that gold prices are in a clear upward trend on the daily chart. Currently, the target of the buyers is to push the price above $3,000/ounce.
On the contrary, the sellers are trying to push the price below $2,800/ounce. In the immediate future, the first important resistance level is $2,950/ounce, followed by the recent high of $2,968.5/ounce. Meanwhile, the support zone is at $2,900/ounce, if it falls further, it could hit the weekly low of $2,879.9/ounce" - Jim Wyckoff said.
