The SPDR Gold Shares ETF (GLD) ended the week close to the fresh all-time high hit on Thursday as the gold market reaps heftily from the ongoing geopolitical and economic uncertainties. Since the beginning of the year, it has sustained the same bullish momentum that yielded a rally of about 25% in 2024. At the time of writing, GLD ETF was at $270.74 after pulling back slightly from the all-time high hit on Thursday at $271.95.
The Trump factor in gold price rallying
Gold is one of the conventional safe havens in times of geopolitical and economic turmoil. In addition to the geopolitical tensions in the Middle East and the Russia-Ukraine war, the entry of Trump into the Oval Office has contributed to the recorded surge in safe haven demand.
Even before his presidential win, the market participants were concerned that his policies would be inflationary. In fact, a day after his inauguration on 20th January, the GLD ETF rose to its highest level in over two months as investors shifted to a risk-off mood.
A month into his second term in office, concerns over his foreign policy and tariffs have continued to bolster gold and gold-affiliated assets to multiple record highs. On Thursday, gold price hit a fresh all-time high at $2,956.05 as financial markets reacted to the probable shift of President Trump’s position on the Russia-Ukraine war.
Read more: Here’s why Goldman Sachs sees further upside in gold prices
In an unexpected turn of events, Trump has termed President Zelensky as a “dictator”. The remarks were in response to the Ukranian President’s assertions that the US president is “living in a disinformation space” governed by Russia.
As the rift between the two leaders deepens, uncertainties over a possible peace deal between Russia and Ukraine have increased. Notably, these concerns have bolstered the demand for gold and other safe haven assets.
Besides, investors are concerned that Trump’s tariffs will be inflationary; an aspect that has further boosted the demand for gold as a hedge against inflation. Since taking office, he has executed several tariffs and threatened to impose others as he reshapes US’ trading relationship with other countries.
The recently released minutes for the Fed’s January meeting highlighted the officials’ concern that the president’s approach would “hinder the disinflation process”. The minutes also pointed to “elevated uncertainty regarding the scope, timing, and potential economic effects of possible changes in trade, immigration, fiscal, and regulatory policies”.
Central-bank buying to bolster gold demand in 2025
In 2024, purchases by central banks from across the globe largely contributed to gold’s rallying. This trend is set to continue in 2025 as they seek to diversify their reserves away from the US dollar and hedge their assets against economic risks.
According to Goldman Sachs, central-bank buying will be a key bullish driver for gold prices. Subsequently, they have adjusted their price forecast to $3,100 an ounce the end of the year.
Holdings of gold-backed ETFs like SPDR Gold Shares ETF have been on the rise as the fundamentals remain in favor of gold’s bulls. Notably, the trend is set to continue surging in coming months.
Read more: The $52 trillion case to buy gold and SPDR Gold Trust ETF(GLD)
GLD ETF stock forecast
GLD ETF chart by TradingView
The GLD ETF has staged a strong comeback, as we predicted in the last article. It finally moved above the bullish pennant pattern that was forming. A pennant is made up of a vertical line and a symmetrical triangle pattern. This pattern is a highly popular continuation sign. It has also moved above all moving averages.
The Relative Strength Index (RSI) and the MACD indicators have all pointed upwards. Therefore, the GLD ETF will likely continue rising as bulls target the next key resistance point at $300. Another scenario is where it drops to $257 and then resumes the bullish trend. This is known as a break and retest pattern.
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