Gold Nears $4,200 — Is This the Start of a New Supercycle in 2025?
Gold prices extended their advance toward $4,200 per ounce, marking another milestone in an already exceptional year for the precious metal.
Quick overview
- Gold prices are approaching $4,200 per ounce, driven by expectations of U.S. rate cuts and geopolitical tensions.
- The metal has surged nearly 59% year-to-date, supported by central bank purchases and a shift towards de-dollarization.
- Technical indicators suggest a bullish trend, with key support levels at $4,129 and $4,088, while caution is advised due to potential bearish RSI divergence.
- A buy-on-dip strategy is recommended, with targets set at $4,220 and $4,260, as long as gold remains above critical support levels.
Gold prices extended their advance toward $4,200 per ounce, marking another milestone in an already exceptional year for the precious metal. The rally has been supported by growing expectations of U.S. rate cuts, renewed trade tensions between Washington and Beijing, and persistent geopolitical uncertainty.
Safe-haven demand strengthened after President Donald Trump signaled potential new trade restrictions on China, while the prolonged U.S. government shutdown and cautious comments from Federal Reserve Chair Jerome Powell added to market unease. Powell noted that the U.S. labor market remains subdued but emphasized that policy decisions will be made on a meeting-by-meeting basis, balancing inflation concerns with economic softness.
Gold has gained nearly 59% year-to-date, underpinned by robust central bank purchases, steady ETF inflows, and an accelerating shift toward de-dollarization. Analysts at Bank of America recently lifted their 2026 price target to $5,000 per ounce, citing structural demand and diversification away from fiat currencies.
Gold Technical Outlook: The Bulls Have This One Wrapped Up
From a technical perspective, gold remains parked in a robust ascending channel, quietly forming a higher-highs and higher-lows pattern since last week. That 100-period simple moving average at 3,924 is being a rock solid support level, keeping the bulls in the driving seat.
Recent candle patterns show a bullish engulfing formation near $4,052 – which just goes to show that buyers are still hungry after a quick correction. The key levels to watch are $4,220 followed by $4,260, with immediate support at $4,129 and $4,088.
But watch out for a potential bearish RSI divergence because the momentum is starting to wane even as gold keeps making new highs. That RSI reading of 69 or so isn’t overbought yet but it’s getting close, which might just see the rally take a bit of a breather before ramping up again.
Gold Trade Setup: Time to Buy the Dips, Not the Breakouts
So far the short term structure is looking good for the bulls and a buy-on-dip strategy is looking more appealing than trying to catch a rising market on the highs:
- Buy Zone: 4,150-4,160 – that channel support is still looking solid
- Target 1: 4,220
- Target 2: 4,260
- Stop-Loss: below 4,088
As long as gold stays above that channel support and the RSI stays above 60 the uptrend is likely to keep on trucking. And the pattern on the chart is starting to look a lot like a “three white soldiers” formation – a classic bullish continuation signal that often precedes a major breakout.
If we do see a break above $4,220 the next test could be the upper channel boundary near $4,295 – and that’s where traders will really start to get anxious to see whether gold’s 2025 rally is just getting started – or starting to show signs of exhaustion.
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