Spot gold rose 4.96% this week: safe-haven demand drives gold prices to their best performance in six weeks
Market Overview
Spot gold performed strongly this week, closing at $3,294.56/oz, up 4.96% for the week, the best weekly performance in six weeks. Concerns about global trade tensions have rekindled, coupled with a weaker dollar, and the attractiveness of gold as a safe-haven asset has significantly increased, pushing gold prices up sharply. In terms of economic data, weak U.S. consumer confidence data and manufacturing activity indicators further supported gold prices. Precious metals such as platinum and silver rose simultaneously, and market sentiment overall tended to be risk-averse.
Analysis of gold market trends
Spot gold showed a trend of first decline and then rise this week, continuing the volatile pattern at the beginning of the week. As market risk aversion heats up, gold prices have risen significantly since mid-week. Spot gold prices hit a high of more than two weeks on Friday. U.S. COMEX gold futures also performed strongly, closing up 2.1% at $3,365.8/oz, with a weekly cumulative increase of 5.1%.
Specific trend analysis:
Oscillating period at the beginning of the week: From Monday to Tuesday, the price of gold fluctuated narrowly around $3,200/ounce, and the market focused on US economic data and geopolitical trends.
Breakthrough upward period: Starting from Wednesday, trade policy uncertainty triggered a decline in global stock markets, and the US dollar index fell by 0.9%, pushing gold prices to accelerate upward.
Continuous strengthening period: On Thursday and Friday, safe-haven funds continued to flow into the gold market, pushing gold prices further higher and finally closing at a high level.
Analysis of core driving factors
1. Rising trade policy uncertainty
The latest threat of high tariffs on EU goods and the proposal to impose taxes on specific technology products have significantly exacerbated market concerns about the deterioration of the global trade environment. This policy uncertainty has put pressure on risky assets and accelerated the flow of funds to safe-haven assets.
2. Weaker US dollar index
The US dollar index fell 0.9% this week, mainly affected by policy uncertainty. The weak US dollar reduces the cost of holding gold denominated in US dollars, providing additional support for gold prices. The negative correlation between the US dollar and gold was particularly evident this week.
3. Weak US economic data
Macroeconomic data released this week showed:
US consumer confidence index was lower than expected
Manufacturing PMI showed a slowdown in expansion
These data weakened market expectations for monetary policy tightening and created a more favorable environment for gold investment.
4. Continued geopolitical tensions
The continued tensions in the Russian-Ukrainian conflict have injected additional safe-haven demand into the market. Although the details of the conflict do not directly involve more countries, its potential impact on the global supply chain still keeps the market on high alert.
Technical analysis and outlook
Key technical position analysis:
Current resistance: $3,500/ounce
Important support: $3,200/ounce
After breaking through $3,500, it may test the $3,800 level
Factors affecting the market:
Actual implementation of trade policies
Changes in the Fed's monetary policy expectations
Performance of US inflation and employment data
Evolution of geopolitical situation
Comprehensive views of professional institutions
Market analysis generally believes that the core driver of the rise in gold prices this week is the safe-haven demand caused by policy uncertainty. The escalation of trade tensions may put pressure on global economic growth, thereby continuously enhancing the asset allocation value of gold. Technical analysis shows that if gold breaks through the key resistance level of $3,500, it may open up greater upside space.
The negative correlation between the US dollar and gold will remain, and any data showing a slowdown in the US economy may further weaken the dollar and provide support for gold. At the same time, the continued existence of geopolitical risks will continue to provide bottom support for the gold market.
Operational suggestions:
Short-term investors should pay attention to the fluctuation opportunities in the range of $3,300-3,500
Medium- and long-term investors may consider building positions in batches at low prices
Need to pay close attention to policy trends and the timing of economic data releases
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.