Gold Soars to Record Highs Amid Dollar Weakness and Escalating Trade Tensions

By: Payel

Published on: Apr 16, 2025

Introduction

Gold prices surged to an unprecedented peak on Wednesday, April 16, 2025, as a weakening US dollar and intensifying US-China trade tensions fueled a rush into safe-haven assets. Spot gold climbed 1.7% Analysts attribute this rally to a perfect storm of macroeconomic factors, including dollar depreciation, risk aversion, and mounting concerns over global economic stability.

In this analysis, we delve into:
✔ Key drivers behind gold’s historic rally
✔ Impact of US-China trade war escalation
✔ Role of Federal Reserve policy expectations
✔ Price forecasts from leading analysts
✔ Market outlook for gold and other precious metals

Why Is Gold Hitting Record Highs? 3 Key Factors

1. US Dollar Weakness

The US Dollar Index (DXY) fell 0.5% to its lowest level since late 2023, making gold cheaper for holders of other currencies. A weaker dollar typically boosts demand for dollar-denominated commodities like gold.

“Dollar depreciation and ongoing risk aversion are working in gold’s favor,” said Tim Waterer, Chief Market Analyst at KCM Trade.

2. Escalating US-China Trade Tensions

• Nvidia’s $5.5B Charge: The US chipmaker disclosed massive losses after Washington restricted AI chip exports to China.


• Boeing Delivery Freeze: China ordered airlines to halt Boeing jet deliveries in retaliation for US tariffs of 145% on Chinese goods.

These moves signal a new phase in the trade war, amplifying fears of a global economic slowdown.

3. Safe-Haven Demand Surge

Investors are flocking to gold as geopolitical and economic uncertainties mount:

• Year-to-date gain: Gold has risen 25% in 2025.


• ANZ Bank’s Revised Forecast: Raised its **year-end target to $3,600/oz\ast \ast (from$3,500).

Gold Price Analysis: Technicals & Market Sentiment

Spot Gold Performance

• Intraday High: $3,290.10/oz (Wednesday session)


• Support Levels: 3,250(psychologicallevel),3,250(psychologicallevel),3,200 (key support)


• Resistance: $3,300/oz (next target)

Precious Metals Overview
Metal              Price (per oz)    Daily Change
Silver               $32.45              +0.5%
Platinum         $956.80              -0.3%
Palladium         $971.24              Steady

While gold dominates headlines, silver has also benefited from safe-haven flows, rising 0.5% to $32.45.

Trade War Escalation: What’s Next?

US-China Tariff Timeline

1. April 14: US imposes 145% tariffs on $250B of Chinese imports.


2. April 15: China retaliates with 84% tariffs on US goods.


3. April 16: China halts Boeing deliveries; Nvidia reports $5.5B export loss.

Economic Impact

• Global Supply Chains: Tech and aviation sectors face disruptions.


• Inflation Risks: Higher import costs could delay Fed rate cuts.

Federal Reserve Policy: Implications for Gold

Upcoming US Retail Sales Data

Investors await March retail sales figures (due Wednesday) for clues on:

• Consumer Spending Trends


• Fed’s Rate Cut Timeline

Rate Cut Expectations

• 2025 Rate Cuts: Markets price in 3 cuts (75 bps total).


• Gold’s Appeal: Lower rates reduce bond yields, enhancing gold’s attractiveness.

Analyst Forecasts: How High Can Gold Go?

Goldman Sachs

• 2025 Target: $3,700/oz


• Extreme Scenario: $4,500/oz if recession risks materialize.

ANZ Bank

• 6-Month Target: $3,500/oz


• Year-End Target: $3,600/oz

GoldSilver Central

“Gold will stay strong as long as uncertainty persists,” said Brian Lan, Managing Director.

Trading Strategies for Gold Investors

Buy Signals

• Dip Near $3,250: Strong support zone.


• Break Above $3,300: Confirms bullish momentum.

Risks to Monitor

• Strong US Economic Data: Could delay Fed cuts, strengthening the dollar.


• Trade War De-escalation: May reduce safe-haven demand.

Conclusion: Gold’s Path Forward in 2025

Gold’s record-breaking rally shows no signs of slowing, driven by dollar weakness, trade tensions, and economic uncertainty. While short-term volatility is possible, the long-term outlook remains bullish, with analysts forecasting prices to reach 3,500−3,500−3,700/oz by year-end.