1. Review
Since the last significant low and trend reversal point on December 18th at $2,585, the gold price has been able to rally spectacularly over the past four and a half months. Already in January and February, gold quotations marched steadily upwards almost daily. Only in the last week of February was there a brief but sharp setback to $2,832.
Subsequently, the uptrend accelerated, allowing the psychological mark of $3,000 to be overrun without much resistance. At $3,167, there was another sharp but extremely brief setback to the technical support at $2,955 amid collapsing stock markets. As this support held, the gold price subsequently exploded by $543 or +18.39% within just ten trading days.
It wasn’t until the round mark of $3,500 that things suddenly stopped, and the bears were able to push gold quotations down by $240 to $3,260 within just 32 hours. Since then, a volatile consolidation has been running, with the bulls’ recovery attempts not reaching beyond $3,370, while the bears have so far failed to achieve a new low below $3,260. As a result, the gold price is currently trapped in a sideways phase in the short term.
Overall, after this massive increase of $915 or +35.4% within just four and a half months, the gold price should have at least entered a healthy and necessary consolidation. A larger top formation including a correction lasting several months would also be conceivable. However, the silver price has so far shown no independent life, so we currently only assume a subordinate intermediate high for the gold price. Nevertheless, consolidation or correction could well drag on even above $3,000.
A decline to prices significantly below $3,000 would only be conceivable if the stock markets were to run into difficulties or liquidity bottlenecks again. This does not seem to be the case at the moment. Rather, the recovery in the stock markets could possibly also help silver.
2. Chart Analysis Gold in US Dollars
2.1 Weekly Chart: Long-term Uptrend Intact Without Danger
Gold in US Dollars, Weekly Chart from April 29, 2025. Source: Tradingview
On the weekly chart, the gold price is safely in a strong and long-term uptrend. The new all-time high at $3,500 currently represents the peak of the bull market, which began with the triple bottom at $1,615 in autumn 2022. With the breakout above $2,075, this rally gradually accelerated since February 2024, and recently took on almost vertical characteristics.
Particularly in the last three weeks, the price explosions on the upside seemed quite exaggerated. Not surprisingly, there was an initial sharp setback to $3,260 immediately after reaching the psychological mark of $3,500. Since then, profit-taking has kept the bulls in check below $3,370, while the bears are making just as little progress on the downside.
Nevertheless, the long wick of the previous week’s candle indicates a short-term exaggeration and reversal or trend change. The bullishly embedded stochastic on the weekly chart is still relatively firmly in the saddle. However, momentum is waning. If this embedded state is lost, a correction lasting several weeks threatens, which could or should lead the weekly stochastic into the oversold zone.
Overall, the weekly chart is still just bullish, as the weekly stochastic is still bullishly embedded. Thus, the uptrend is secured as long as the stochastic does not lose this state. Both stochastic signal lines have already turned downwards and it doesn’t take much more for a clear sell signal on the weekly chart.
We suspect that the initiated setback will return the gold price to the range between $3,050 and $3,175. However, from a technical perspective, the long-term uptrend remains intact as long as the gold price can defend the critical support zone between $2,955 and $3,050.
On the upside, only a clear rise back above $3,370 would defuse the unfavorable starting position. In this case, the rally would likely simply continue and new all-time highs could be seen soon.
2.2 Daily Chart: Sideways Movement at a High Level
Gold in US Dollars, Daily Chart from April 29, 2025. Source: Tradingview
On the daily chart, the gold price had recently moved very far from its rapidly rising 50-day line (3,067 USD) and had risen almost vertically. Eventually, there was a sharp reversal at 3,500 USD. The candlestick structure of the last few days suggests a top formation.
However, the bears need a breakthrough below 3,260 USD for confirmation. So far, the bulls have already managed to force a significant recovery or counter-movement back above 3,300 USD and 3,330 USD three times. Overall, the price has been moving sideways at a high level for about a week in a tricky manner.
If the sell signal on the stochastic oscillator continues to unfold, new selling pressure should emerge soon, followed by new lows. Besides the rapidly rising 50-day line (3,067 USD), the open price gap around 3,175 USD would be the next logical price target.
In summary, the daily chart shows a bearish picture. However, the sideways movement at a high level still keeps the possibility of a continuation of the steep rally open. The zone between 3,260 and 3,370 USD is neutral. Above 3,370 USD, the bulls have prevailed and the rally should accelerate further towards 4,000 USD. Below 3,260 USD, on the other hand, the correction scenario would be confirmed and the open price gap at 3,175 USD should be quickly approached.
3. Futures Market Structure Gold
Commitments of Traders Report for the Gold Future as of April 28, 2025. Source: Sentimenttrader
At the closing price of around 3,380 USD, commercial traders held a cumulative short position of 202,268 gold futures contracts on Tuesday, April 22. Apparently, after the breakout above 3,000 USD, the professionals have partially closed or had to close their short positions into the strongly rising prices. In any case, the currently reported short position is almost 100,000 contracts lower than two months ago. At that time, the gold price was trading around 2,900 USD, almost 400 USD lower.
In parallel, the ‘open interest for gold futures’ showed a rollercoaster ride over the last two months. After a strong increase in March, there was initially a massive decline in April. Only compared to the previous week did the open interest rise slightly again by 8,723 contracts to a total of 465,351 contracts.
Overall, the CoT Report remains negative based on the last 20 years. Apparently, both bulls and bears have used the steep rally in recent weeks to reduce their positions in the futures market. It’s noteworthy that commercial traders have closed a third of their short position into rising prices, thus deleveraging.
4. Gold Sentiment
Sentiment Optix for Gold as of April 28, 2025. Source: Sentimenttrader
Since mid-September 2024, sentiment in the gold market has repeatedly risen to the level of excessive optimism. Unlike typical overheating scenarios, however, we did not expect a sentiment reversal or a swing to the opposite extreme of panic.
Instead, our ‘cold shower’ thesis was confirmed. The sometimes severe but short-lived price drops deliberately created skepticism or mistrust and allowed investor sentiment to cool down in a healthy manner, without triggering destabilizing overreactions on the downside. This pattern led to a remarkable elasticity in the gold market, where the overheated or overbought conditions regularly corrected themselves.
Due to the significant pullback from 3,500 USD, the Gold Optix is now coming back from the extreme zone again and reports a fairly neutral sentiment with a value of 69. However, the Optix should not drop much below values of 50-60, otherwise a larger correction could indeed be looming.
In summary, optimism in the gold market has cooled significantly and is no longer standing in the way of a continuation of the rally.
5. Gold Seasonality
Seasonality for the gold price over the last 15 years as of April 28, 2024. Source: Seasonax
At the end of April 2025, historically speaking, the gold market is still in a phase of seasonal strength. In the past, an important high point was often found between March and mid-May. The new all-time high of 3,500 USD on April 22 would fit very well into this time window. Accordingly, one would have to expect rather falling or consolidating gold prices over the next two months until about mid-June or even early July.
However, this argument lacks the typical end sprint of silver. Of course, the gold price could consolidate sideways and silver could rise together with the stock markets. But it’s more likely that both precious metals will generally march in the same direction.
Overall, the favorable seasonality ends by mid-May at the latest and a correction is expected until mid/end of June.
6. Macro Update – Gold Rush in China
The first 100 days for the S&P 500 under a new US President. Source: Holger Zschaepitz
In the first 100 days of President Trump’s new administration, the US stock market experienced its strongest decline since Nixon took office in 1973, causing concern among investors and analysts worldwide. Consequently, the market volatility indicator VIX shot up to values above 60, which has only happened five times in the last 35 years. A VIX of 60 not only signals high market uncertainty but also a structurally significant exhaustion of narrative compression in macro, political, and liquidity systems. It marks a liquidity asymmetry, triggered by macroeconomic divergences, derivative cascades, and volatile politics, causing risk models to suddenly fail and critical liquidity to dramatically diminish briefly.
Buy When Fear Is Greatest
Smart Money vs. Dumb Money Confidence as of April 28, 2025. Source: Sentimentrader
After such extreme fear spikes, markets usually recover significantly after six to twelve months, as historical VIX 60+ events (2008, 2020, 2023) always brought a narrative overcorrection followed by liquidity restoration. The current instability has already forced Trump, ECB, and China to stabilize. For example, the European Central Bank has lowered interest rates and China implemented economic stimulus measures. Trump also softened his stance on China and his tariff policy. However, pessimism is now widespread and deep-seated again. Conversely, the chances for a broad and surprisingly strong recovery in the financial markets are good.
Short-Term Pain for Long-Term Gain
The successful trade lies in anticipating capital redistribution: capital first seeks safety (government bonds, mega-caps), then narrative assets (gold, Bitcoin, AI). This is the reactivation of the capital mechanism when systemic fear becomes tradable. We therefore suspect that the dramatic interpretation of the events of recent weeks might be somewhat exaggerated. After all, the Trump administration is boldly tackling deeply rooted, long-standing economic challenges in an unconventional and forceful manner. By implementing bold political reforms and prioritizing structural problems that have been ignored for decades, the new US administration aims to create the foundation for sustainable growth, even if short-term market volatility temporarily conveyed a rather gloomy picture. The motto is: ‘Short-term pain for long-term gain’.
China’s Long Battle with the USA
Chinese exports to the USA. Source: Holger Zschaepitz
China, on the other hand, has been increasing its pain tolerance for years for the long battle with the USA. Unlike Western democracies, which often rely on short-term electoral successes and public opinion, China, as an authoritarian regime, can tolerate short-term economic or social burdens much better, as it is less exposed to pressure from immediate elections or public opinion. To implement its ambitious and long-term plans aimed at technological autarky and global leadership in key industries as well as long-term competitive advantages, China relies on central planning, state interventions, and a high degree of political control.
The Chinese leadership, invoking the legacy of Mao Zedong, emphasizes its readiness for a prolonged confrontation with the USA and contrasts the firmly rooted rule of the Communist Party with the voter-dependent political volatility of the USA. Since the trade disputes of the first Trump administration, Xi Jinping has strengthened China’s authoritarian systems and expanded censorship and surveillance to prepare for potential economic challenges from the USA.
Xi’s leadership is characterized by centralized power, having abolished term limits and prioritized propaganda and security to ensure stability. While China’s economy is vulnerable to US tariffs due to its export dependence, it is simultaneously supported by a robust ‘stability maintenance’ apparatus, including AI-powered surveillance and a domestic security budget of $209 billion in 2023. This system, refined during the Covid-19 lockdowns and 2022 protests, enables China to suppress dissent and manage or mitigate economically negative consequences (tariff impacts) with tools such as fiscal stimuli and targeted subsidies.
Despite China’s high capacity to endure economic pain, significant tariff-related disruptions could strain the social fabric, particularly among workers who constitute a large part of the country’s dissent. While Beijing’s propaganda meets some domestic skepticism, the sophisticated control mechanisms, including AI-powered predictive policing and the ‘Fengqiao model’ of community surveillance, are designed to prevent unrest. Only a split within the leadership, as in 1989, could seriously destabilize the regime in China. However, Xi’s consolidated power seems unassailable in the current trade conflict.
Gold Trading in China Explodes
Gold Trading in China Explodes. Source: Bloomberg
Not surprisingly, Chinese citizens are therefore buying more and more gold. With Bitcoin banned in mainland China, Chinese real estate markets collapsing, and capital controls severely restricting flight abroad, there is no other liquid store of value. One can therefore speak of a gold rush in China.
This has gained increasing momentum in recent months, driven by economic uncertainties, geopolitical tensions, and rising inflation. In particular, the growing middle class and the loose monetary policy of the People’s Bank of China have fueled gold consumption in the form of jewelry, bars, and investments. Moreover, the government is promoting gold purchases as part of a strategy to diversify currency reserves.
Gold trading in Shuibei on April 28, 2025. Source: Bai, Xiaojun
In Shuibei, a central trading hub for gold in China, there are nearly 12,000 gold shops that serve an average of 100,000 customers daily and trade about 1,100 kg of gold. 36,000 gold products are sold per day, with gold imported directly from South Africa, Russian mining companies, and through the Shanghai Gold Exchange (SGE). Despite the short-term price spike in the gold price, the gold rush in China is likely to continue in the medium term.
Countercyclical Opportunities Amid Global Market Upheavals
Regardless of the expected short to medium-term recovery in stock markets, global financial markets face structural challenges: demographic change, artificial intelligence, and the shift of economic power to Asia require a realignment of investment strategies. The Trump administration is focusing on protectionism and national interests, while China and India are expanding their global presence.
Investors must therefore prepare for a decade of upheavals, in which flexibility and diversification will be crucial. At the same time, precious metals will continue to be a rock in the storm and thus remain an indispensable component of the portfolio.
In parallel, current market uncertainties offer countercyclical opportunities. Particularly inflation-resistant investments in the energy sector (oil and gas) appear significantly undervalued. Narrative assets such as AI and Bitcoin are likely to remain in demand. In addition, a significantly stronger geographical diversification into emerging markets is recommended.
7. Conclusion: Gold – Catching Breath in the Gold Rush
The gold price has made an impressive rally since its low point on December 18, 2024, at $2,585, with an increase of $915 (+35.4%) in just four and a half months. Starting from the new all-time high of $3,500, the gold market has been consolidating the strong price increases for about a week in the form of a sideways movement between $3,260 and $3,370.
From a technical chart perspective, the long-term upward trend remains intact as long as the support zone between $2,955 and $3,050 holds. Nevertheless, a correction lasting several months would be possible. However, we are missing the typical final sprint in silver to definitively declare an intermediate high in gold.
Ultimately, a lower low below $3,260 would likely provide needed clarity and confirm a trend reversal. In this case, a somewhat larger pullback to the range of $3,050 to $3,125 could be expected.
If the gold price instead breaks out above $3,370, the gold rush continues without interruption. New all-time highs would then likely be possible as early as May, while price targets of $4,000+ would be realistic for the year.
