Gold prices have hit an all-time high due to a mix of economic trends and market signals. This surge confirms that gold will be one of the best-performing assets of 2025. Rising trade tensions, especially the doubling of U.S. tariffs on imports from India, have made gold more appealing as a safe investment. As a result, gold prices in India reached ₹1.02 lakh for 10 grams. In the U.S., disappointing economic data has increased the likelihood of a Federal Reserve rate cut in September, now over 90%. This has pushed gold prices to $3,418 per ounce. At the same time, China’s central bank is boosting its gold reserves, driving global demand even higher. As gold prices exceeded the $3,400 resistance level, they have moved into new territory.

Citi’s Revised Forecast

Citi has updated its gold forecast for the next three months to $3,500 per ounce. The new U.S. tariffs on gold bars have affected gold flows, which could raise costs for buyers and tighten global supply. This uncertainty enhances gold’s attractiveness. Gold’s recent increase shows potential for long-term growth, with significant gains over the past months. Current COMEX Gold Futures are at $3,488.7 per ounce, approaching new highs. This analysis highlights how macroeconomic factors and market trends are driving the current rise in gold prices. Proper risk management is essential in this environment. With gold breaking above $3,400, we suggest that derivative traders maintain a bullish outlook. This movement is supported by a strong combination of technical indicators and essential market factors, signaling a strong upward trend. This is not just a short-lived spike but a continuation of a trend that has already delivered over 31% gains this year.

Weak Jobs Report Impact

The weak jobs report for July, which showed only +95,000 jobs added compared to the expected +185,000, was a critical factor. This shortfall, along with an increase in unemployment to 4.1%, has led to strong expectations for a Fed rate cut in September. A similar trend occurred in late 2023, when changes in Fed language caused gold prices to rally for several months. Demand from central banks, especially China, has been a key support for the gold market. After a pause in mid-2024, the People’s Bank of China resumed buying, adding 1 million ounces in the second quarter of 2025. This steady buying helps stabilize the market and absorb minor dips. Trade tensions are intensifying, and the new tariffs on imports from India and on gold bars are particularly important. During the U.S.-China trade war of 2018-2019, gold rose by over 25% as investors sought safety amid uncertainty. The current tariffs on physical gold could restrict supply even more, leading to a potentially explosive market situation. To express a bullish view, traders might consider buying call options on COMEX futures to capitalize on further price increases with limited risk. Traders are eyeing $3,550 and $3,600 strike prices for September and October contracts. Bull call spreads can also reduce upfront costs in this rising volatility environment. However, managing risk is vital at these new highs. With prices climbing over 20% in the past six months, the market could experience sharp declines with unexpected news. Traders should think about using defined-risk option spreads or set strict stop-loss orders on long futures positions to safeguard their capital. Create your live VT Markets account and start trading now.

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