Gold prices may continue to rise – levels an ounce could hit against the USD

What factors have recently driven gold prices higher?

One of the main drivers behind the recent rise in gold prices is growing risk aversion in the markets, prompting investors to turn to the safe haven of gold. Many expect that second-quarter data (to be released in the third quarter) will show a contraction in the US economy. Forecasts also point to a clear slowdown in US growth in the fourth quarter of this year, with rates dropping to 1.4%, compared to 3% in the same period last year.

Another contributing factor is concern over President Trump’s attempts to influence the Federal Reserve’s independence by pressuring the Fed Chairman to cut interest rates. Trump has even hinted at the possibility of removing him from office. However, markets are not reacting strongly to these threats, at least for now, since US law protects the Fed Chairman’s tenure until the end of his term. Any early dismissal would require legitimate grounds—not just policy disagreements. As a result, it’s likely the Fed Chairman will remain in office until his term concludes in May of next year.

Is the inverse relationship between gold and the dollar still holding?

Gold prices have risen nearly 15% since April 9, while the US dollar has dropped by 4.5% during the same period—prompting questions about the strength of the traditional inverse relationship between the two.

One key reason for the surge in gold prices is the increased gold buying by central banks since early last year. Their aim has been to reduce reliance on US dollar reserves, diversify their holdings, and seek alternatives to the global dollar-based payment system. This shift gained momentum after actions by recent US administrations—such as the Biden administration’s exclusion of Russia from the SWIFT banking system and the Trump administration’s sweeping tariffs that disrupted global trade and supply chains.

Although the inverse relationship between gold and the dollar still holds—since gold is priced in dollars—the dollar’s strength or weakness is now just one of several factors influencing gold prices.

Gold approaches $3,500/oz

Gold reached a record high of $3,499 per ounce during today’s session before retreating slightly on profit-taking. Currently, prices are trading within a zone of $3,357 to $3,500. A daily close above the high end of this zone would confirm strong bullish momentum and could push prices toward $3,600 per ounce.

Levels to Watch in a Bearish Scenario

If gold fails to close above $3,500 and the Relative Strength Index dips below 70, this would signal weakening momentum and reduced buying interest. That could lead to a price decline toward the low end of the current range. A daily close below $3,357 could trigger further selling pressure, potentially pushing prices down to $3,130. In this case, the support level of $3,245 should also be considered.

Gold price – Daily Chart

Chart Source: ADSS Platform