A global monetary easing cycle amid escalating tariffs on trade has investors flocking to gold, fearing a stagflationary recession. The safe-haven metal has continued to post new all-time highs above $3050 following recent dovish monetary policy statements from several central banks, for an over 15% gain thus far in 2025.
Recent attacks on Gaza are lending further support to gold, as tensions in the Middle East have emerged once more with opposition to Israeli Prime Minister Benjamin Netanyahu finding a voice.
Technically, Gold Futures have recently exceeded the initial Cup & Handle breakout target of the psychologically important $3000 per ounce, and there is a logarithmic target of $4000.
This uber-bullish pattern was established in 2020 as gold topped out and began what eventually became a 4-year handle-making phase, then completed the 13-year pattern consolidation by breaking out above $2100 at this time last year.
Following an expected quarter-point rate cut from the Bank of Canada last week, the Bank of Japan (BoJ) kept interest rates steady on Wednesday, pushing April Gold to a weekly close above $3000.
The gold price posted fresh all-time highs above this key level later Wednesday, after the Federal Reserve raised inflation expectations and lowered its growth forecast, indicating growing stagflation risks.
Looking at economic activity, the U.S. central bank now expects GDP to grow just 1.7% this year, down from its previous forecast of 2.1%. GDP is projected to stabilize at 1.8% for the next two years, revised downward from 2.0% and 1.9%, respectively.
As for continued sticky inflation, the Fed expects the core Personal Consumption Expenditures Index (PCE) to rise 2.8% this year, up sharply from December’s forecast of 2.5%. Core inflation is expected to be 2.2% in 2026 and 2.0% in 2027, unchanged from last year’s projections.
The Fed left interest rates unchanged, as expected, within a range of 4.25% to 4.50%. With the central bank in no hurry to cut interest rates, the Fed provided little guidance on its monetary policy.
President Trump criticized the Federal Reserve and its Chairman Jerome Powell in a post to Truth Social on Wednesday night: “The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy. Do the right thing. April 2nd is Liberation Day in America!!!”
On April 2, Trump will implement “retaliatory tariffs” to offset the import taxes and non-tariff barriers of all trading partner countries. With less than two weeks until these new reciprocal tariff rates take effect, there is a risk of a further escalation of the trade wars between the U.S. and its key trading partners, which will raise recession fears.
Fed Chairmen Jerome Powell did say on Wednesday that the central bank planned to cut rates twice later this year, but not in time for Trump's proposed “Liberation Day.”
Following the mid-week Federal Open Market Committee meeting, the central bank spotlight turned to some of its European counterparts on Thursday.
The Bank of England (BoE) held interest rates at 4.5%, while Governor Andrew Bailey said the central bank still thought rates were on a gradually declining path. Bailey also stated the BoE would look "very closely at how the global and domestic economies are evolving at each of our six-weekly rate-setting meetings."
Sweden's Riksbank kept its policy rate unchanged at 2.25%. The Swiss National Bank cut its main interest rate to just above zero, saying inflationary pressures were well contained despite increased uncertainty over the global impact of President Donald Trump's trade policies.
With 2025 shaping up to be one of the most unpredictable years in modern history, rising global sovereign debt levels and increased geopolitical tensions have also pushed investors toward gold as a hedge.
However, Gold Futures have recently become extremely long-term overbought and are approaching a parabolic curve. With a monthly Relative Strength Index (RSI) at 82, bullion is highly susceptible to a healthy profit-taking correction in the near-term as we approach quarter-end in 6 trading days.
Big round numbers have spooked gold in the past. When both $1000 and $2000 were reached, there were extended pullbacks in the gold price before eventually continuing higher.
On the upside, after reaching its first primary Fibonacci target at $2461, the next Fibonacci target in gold is at $3336 based upon the depth of the 2011 to 2015 pullback.
On the downside, there is support at $3000 and $2950, with stronger support on its rising 18-week moving average at $2800. A drop in Gold Futures below strong chart support at $2800 would produce near-term technical damage and begin to suggest an intermediate-term market top being in place.
Meanwhile, with investors taking profits in overvalued general equities and crypto, gold stocks are setting up to experience inflows via cash raised by generalist funds and retail investors as gold against the S&P 500 is breaking out of a 4-year base.
President Trump's trade policy is reshaping capital flows, with the gold complex being the primary beneficiary. As historically overvalued general equities are now mean-reverting to the downside, historically undervalued gold stocks have been mean-reverting to the upside.
Mining industry margins are surging as the gold price has structurally moved higher, due to a supportive combination of large-scale central bank buying, heightened geopolitical instability and exponential growth in U.S. Federal debt levels, encouraging investors to diversify away from overpriced U.S. equities and towards gold stocks.
The dramatic pickup in North American physical ETF demand, mentioned in the space last week, is evidence that western capital markets are finally getting on board with their massive buying power turning bullish for both gold and silver.
The hedge funds see this as well, and are set to increase their buying of futures and leveraged miner ETFs, as nothing else is performing so well.
Yet, despite gold surpassing $3000 during a backdrop of economic and geopolitical uncertainty, Western investors remain underexposed. Current ETF holdings are around 86 million ounces, down from over 110 million during the COVID era—indicating substantial upside potential for gold.
Following a 4.5-year cup & handle breakout last week above key multi-year resistance at $43 in GDX and $54 in GDXJ, the technical targets are $60 and $85, respectively.
The GDX is in the early stages of breaking out above 13-year resistance, jumping 30% year-to-date. The major miner ETF has significantly outperformed the S&P 500, which has lost 4% in 2025.
GDX, which includes mining giants Newmont (NEM) and Agnico Eagle Mines (AEM) as its two largest holdings, has climbed 53% over the last year.
NEM has formed a bullish 2.5-year inverse Head & Shoulders bottom and appears to be headed to the neckline at $55 soon. The stock is on the verge of an epic rally from this major accumulative base, that could eventually bring the price back to the 2022 all-time high near $78 before year-end.
With Newmont also being the only gold stock in the S&P 500, a rise in volume associated with a potential breakout above this level would indicate generalist capital coming into the mining space in size.
Following a grueling 4-year bear market in silver and the junior mining sector into 2025, we appear to be in the early stages of a massive breakout in both as well.
The high-risk/reward silver junior ETF (SILJ) is breaking out of its own 4-month inverse Head & Shoulders bottom, gaining 30% this year, while Silver Futures closed at a 13-year high last week.
With gold making 46 new all-time highs in 2024, and 16 more new highs already in 2025, it stands to reason that this is shaping up to be the year silver finally makes its run following 4.5 years of consolidation, mostly below $30, to create a strong base.
Follow-through with a monthly/quarterly close above $35 at the end of March would open the door to $40, and a possible test of the all-time high at $50 later this year.
With gold stocks breaking out of a huge accumulative 4-year base, the beaten down and left for dead in 2024 mining sector is in the process of a 2025 mean reversion, with many quality juniors trading at low-risk entry points.
At Junior Miner Junky (JMJ), my over two decades of experience in the mining space has subscribers and I well positioned for outsized gains. After loading our highly leveraged junior portfolio with 20 quality small-cap gold, copper, and silver related stocks, several are breaking out to multi-year highs with the sector, with others yet to catch up.
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