Gold: The King of 2025, but for How Long?

Gold has taken the crown as the undisputed king of 2025. But the question
remains: how long can it hold that crown?

Since the start of the year, gold prices have surged more than 46 percent, breaking
through the 3,850 dollars per ounce barrier. While some traders are waiting for a
pullback to take advantage of short-selling opportunities, many others including
retail investors, institutions, and central banks continue to increase their
holdings. Their expectation is that gold could reach the symbolic 4,000 dollars per
ounce level before the end of the year.

Still, gold’s rise or fall depends on multiple factors. What pushes prices higher
today could easily reverse tomorrow.

Why Gold Wears the Crown in 2025

1. Trump’s second term and renewed trade war fears
Donald Trump’s return to the White House for a non-consecutive second term has
been a turning point. In line with his campaign promises, he imposed new tariffs in
April, sparking fears of another trade war. Investors of all types, from individuals
to central banks turned to gold as a hedge, aiming to protect their wealth from
risks such as the return of high inflation, similar to mid-2022.

2. The Fed’s rate cuts
Markets had anticipated rate cuts, and they happened. The Fed lowered rates by
25 basis points at its last meeting. Two more cuts of the same size are expected in
the upcoming meetings before the end of 2025. Lower rates tend to support gold
prices.

3. A weaker dollar
The combination of tariffs and lower interest rates has pushed the US dollar
sharply lower. As a result, investors have been buying more gold, which has
reasserted its position as the leading safe-haven asset.

4. Ongoing geopolitical tensions
Conflicts in the Middle East and Europe remain unresolved. Markets are no longer
moved by statements alone and are waiting for serious, concrete steps. Until then,
uncertainty continues to drive demand for gold.

5. US government shutdown
The possibility of a government shutdown has added yet another reason for gold’s
rise. With no agreement on spending plans, the US government could shut down
in early October. The last shutdown happened at the end of 2018 during Trump’s
first term and lasted 35 days, the longest in American history.
If another shutdown occurs, the release of important economic reports could be
delayed, including:
• Nonfarm payrolls (October 3)
• Unemployment claims (October 2, 9, 16)
• Trade balance (October 7)
• Consumer Price Index (CPI) (October 15)
• Retail sales (October 16)
• Producer Price Index (PPI) (October 16)

If these reports are delayed, uncertainty in the markets will only grow, which
would again support gold prices.

What Could Weigh Against Gold

• If gold hits 4,000 dollars, profit-taking may trigger. This level is a
psychological barrier and a target for large banks. Selling at that point could
spark fear of bigger corrections and lead to more closures and selling
waves.
• A trade deal between the United States and major partners such as India or
China.
• A resolution of conflicts in the Middle East and Europe.
• A rebound in the US dollar if the Fed changes course. Some members, such
as the Cleveland Fed president, have already voiced concerns about
inflationary pressures. If the Fed holds rates steady at its next meeting on
October 28–29 instead of cutting, that would go against market
expectations, strengthen the dollar, and weigh on gold.

At the moment, none of these negative factors are materializing. Geopolitical and
economic disruptions are still present, keeping the case for gold intact.

Technical Outlook: Gold vs USD (XAUUSD)

• Support: A decline to 3,751.27 would be seen as a corrective move, paving
the way for the continuation of the upward trend.
• Targets: 3,838 in the medium term, and 4,000 over the longer horizon.
• Invalidation: A daily close below 3,717.47 would cancel the bullish outlook.

Gold remains the king of 2025. The real test is whether it can defend that crown as
Washington, central banks, and geopolitics continue to write the next chapter.