Gold prices took a breather this week, easing slightly from the record high of $3,245.42 per ounce. The pullback reflects how sensitive markets remain to developments in global trade policy. A recent announcement from the U.S. government granting temporary tariff exemptions on some electronic products made in China helped ease fears of escalating U.S.-China trade tensions. As a result, investors briefly shifted out of safe-haven assets like gold and into riskier investments, causing gold’s rally to pause.
Despite the short-term dip, the medium- to long-term outlook for gold remains strong, supported by several key fundamentals. The growing expectation of interest rate cuts by the Federal Reserve, a weakening U.S. dollar, and continued geopolitical uncertainty all provide a solid backdrop for gold to potentially break new highs again.
On Monday, spot gold slipped about 0.3% to $3,225.79 per ounce, while June gold futures nudged lower to $3,240.87. The retreat was driven largely by the U.S. tariff announcement, which lifted investor sentiment in major tech stocks like Apple and sparked a rebound across both Asian and U.S. futures markets. That reduced the immediate need for hedging in gold.
Still, uncertainty remains. Former President Donald Trump quickly responded by affirming that the baseline 20% tariffs would stay in place, and hinted that details on new semiconductor import taxes would be released soon. This illustrates that the trade dispute is far from over, keeping some investors positioned defensively in gold.
Fund managers and institutions remain bullish on gold from a fundamentals perspective. Goldman Sachs, which recently lifted its gold outlook, has now revised its 2025 target price to $3,700 per ounce, reaffirming strong long-term conviction in the metal.
Beyond policy factors, broader market conditions also support gold. The U.S. Dollar Index remains near four-month lows, and 10-year Treasury yields are staying below 4.2%, lowering the opportunity cost of holding a non-yielding asset like gold. Fed officials have suggested that, as long as inflation continues to cool, two rate cuts could be on the table this year. Futures trading indicates most investors now expect the Fed to begin easing by the third quarter.
Physical demand is also staying robust. In India, the price of 24K gold hit a new record of ₹94,030 per 10 grams on Monday, driven by wedding season demand and inflation-protection buying. Meanwhile, China’s gold market remains active, with the local premium widening to $35 per ounce last week—signaling strong physical demand from mainland investors. The World Gold Council reported that in Q1 alone, central banks purchased 289 metric tons of gold globally, marking a year-over-year increase of over 10%—another bullish indicator.
From a technical standpoint, gold has been on a steady uptrend since the beginning of the year, and $3,200 has now emerged as a strong support level. Analysts note that the recent pullback is mild—less than 1%—while gains from the February lows still exceed 15%. Futures market data shows that open interest in gold contracts remains near historic highs, suggesting that trader participation remains high despite short-term volatility.
Looking ahead to the rest of the week, markets will be closely watching upcoming U.S. March retail sales data and the Federal Reserve’s Beige Book report. These will play a key role in shaping expectations for the U.S. economy and the direction of monetary policy. At the same time, geopolitical tensions remain a risk factor. The Israeli government recently issued a strong statement indicating plans for military action against groups backed by Iran, which could again drive demand for safe-haven assets like gold.
Even among analysts, opinions are split. JPMorgan suggests a strategy of “buying low and selling high” within the $3,150 to $3,300 range, predicting gold will continue to be influenced by geopolitics and tariff news. By contrast, Citi has warned that gold’s technical indicators suggest it is overbought, and if the Dollar Index rebounds past the 105 mark, gold could correct toward $3,100 in the near term.
The retail market also reflects this division. According to data from the Mumbai Gold Exchange, physical gold sales dropped by 40% on April 14, while holdings in gold ETFs surged by 8.7 metric tons the same day—a sign that many investors are now using financial instruments to position themselves for longer-term gains. Local precious metal dealers have been advising clients to allocate 15%–20% of their portfolio to gold and consider using options to hedge against short-term price swings.
All things considered, gold remains in focus amid ongoing uncertainty surrounding trade and monetary policy. With $3,200 per ounce acting as a solid floor and fundamentals still favoring gold, many analysts believe the metal has room to challenge the $3,500 mark—and possibly beyond—in the coming months.