After a brief pullback, gold has made a striking comeback — reclaiming the $4,000 mark following a four-day decline. Renewed safe-haven demand, a softer US dollar, and optimism following US–China trade talks have reignited investor interest in the precious metal.

Spot gold (XAU/USD) climbed 1.3% in early European trade to around $3,982 per ounce, recovering nearly 5% from recent losses. The rebound was supported by strong central-bank buying and broader economic uncertainty stemming from the prolonged US government shutdown.

Adding to the momentum, President Donald Trump called his meeting with Chinese leader Xi Jinping “amazing,” revealing a limited trade deal that includes halved fentanyl tariffs, renewed soybean imports, and a one-year pause on rare-earth licensing. Markets took this as a positive sign of easing trade tensions, offering some stability to investors while reinforcing gold’s role as a hedge against volatility.

Fed Cuts Rates but Signals Caution

The US Federal Reserve announced its second 25-basis-point rate cut of 2025, while maintaining a cautious approach toward further easing. Chair Jerome Powell acknowledged slowing labour-market trends but warned against over-cutting without stronger economic signals — helping the US dollar avoid deeper losses and indirectly supporting gold.

Technical Outlook

From a technical standpoint, gold now faces short-term resistance at $4,016 and $4,060, with immediate support levels near $3,950 and $3,886. The $4,000 mark serves as a critical pivot point — representing the 23.6% Fibonacci retracement line — which traders see as a key indicator of short-term strength.

A clear break above $4,016 could set up another run toward $4,100, while a drop below $3,900 might indicate renewed downward pressure.

Market Sentiment and Outlook

So far in 2025, gold has surged nearly 50%, while silver has gained about 60%, fuelled by persistent inflation fears, strong central-bank demand, and investor preference for tangible assets. Silver currently trades near $47.77 per ounce after rebounding from one-month lows.

At the recent LBMA Global Precious Metals Conference, market delegates projected that gold could rise another 25% over the next year — potentially testing $4,980 per ounce and even challenging the $5,000 milestone. Experts point to ongoing inflation risks, geopolitical uncertainty, and central-bank diversification as the main drivers behind the metal’s resilience.

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