Spot Gold Market Update

01/09/25

Gold demand surges on Fed rate cut expectations, record central bank buying, and steady investor inflows. 

Bullish outlook with prices breaking higher, strong technical support, and forecasts pointing toward the $3,700–$4,000 range.

Drivers of Gold’s Price Rise 

Gold prices remain supported as investors seek a hedge against inflation and uncertainty, with geopolitical tensions and economic risks driving safe-haven flows while global central banks sustain robust purchases to diversify reserves and reduce reliance on currencies such as the US dollar. 

Central banks bought a record 244 tonnes in Q1 2025, the strongest first quarter on record. This builds on the surge of over 1,000 tonnes annually from 2022–2024. Poland was a standout buyer, adding about 67 tonnes in the first five months of 2025, while China continued steady accumulation despite high local prices. Analysts forecast around 900 tonnes of central bank purchases for full-year 2025, just slightly below 2024’s 1,045 tonnes. Surveys show nearly half of central banks intend to continue increasing reserves, citing diversification and hedging motives.

Goldman Sachs targets $3,700 by year-end 2025, with an upside case of $3,880 in a US recession scenario. J.P. Morgan projects $3,675 by Q4 2025 and $4,000 by mid-2026. Other analysts expect gold to break into the high $3,000s, with $4,000 a widely discussed milestone if monetary easing and central bank demand persist. 

Technical Analysis: Short-to-Medium Term Outlook  

Gold’s chart continues to tell a bullish story. After an impressive climb earlier in the year, the market spent much of the spring and summer moving sideways, consolidating between roughly $3,200 and $3,440. This pause was not a sign of weakness, but rather a healthy period of digestion as buyers and sellers battled for control. Toward late August, the balance tipped in favour of the bulls, with prices breaking out of that range and pushing firmly above the $3,400 level. That breakout has transformed the old ceiling into a new floor, a classic technical shift that suggests further upside could lie ahead.
 
The moving averages support this view. The short-term 20-day EMA, which had been flattening during the consolidation, is now turning higher, while both the 50-day and 200-day averages remain in strong uptrends. Importantly, the 50-day sits comfortably above the 200-day, underscoring that the longer-term structure remains positive. Momentum indicators are also aligned with this story: the RSI, which had cooled from earlier overbought levels, is now mid-range and rising, indicating there is still plenty of room for further gains without the market being overstretched. 
 
Key levels to watch are clearly defined. The first line of defence sits around $3,350 to $3,320, with deeper support in the $3,200 to $3,270 zone – levels where buyers have consistently stepped in on past pullbacks. On the upside, $3,500 remains the next major psychological and technical barrier. A sustained move above this level could open the door to targets in the $3,600–$3,800 region, with the much-discussed $4,000 mark as a longer-term beacon.
 
In short, the technical backdrop remains constructive. Gold has shaken off its consolidation phase, momentum is improving, and the trend continues to lean higher. As long as support holds and the recent breakout is maintained, the market appears well positioned for another leg up.

Sources 

• Goldman Sachs forecasts and ETF demand outlook – CNBC / Market coverage (May 2025)
• J.P. Morgan Research projections – JP Morgan Markets Insights (2025) 
• World Gold Council central bank demand survey and Q1 2025 data 
• Reuters, Financial Times, and Bloomberg reporting on central bank purchases (Poland, China) 
• Market technical analyses from Kitco, Investing.com, and Trading Economics  

This article is for informational purposes only and does not constitute investment advice, a personal recommendation, or an offer or solicitation to engage in any investment activity. The mention of any security, commodity or issuer should not be interpreted as a recommendation to buy or sell. Any views expressed are based on public information believed to be reliable at the time of writing, but no representation or warranty is given as to its accuracy or completeness.
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