Gold price breaks the $3000 mark for the first time, driven by both safe haven sentiment and weak data

Gold prices hit a historic high

On the morning of March 18th in the Asian market, spot gold continued its strong performance, trading at $3002.15 per ounce, fluctuating above the $3000 integer level. On Monday (March 17th), gold prices closed up 0.43% at $3000.83 per ounce, marking the first time in history that they closed above $3000. The intraday high reached $3004.97 per ounce, breaking a record high. This breakthrough is mainly driven by multiple factors such as weak US retail data, tense geopolitical situation, and rising expectations of interest rate cuts by the Federal Reserve.

Multiple factors resonate to drive up gold prices

Economic recession concerns intensify

The latest data from the US Department of Commerce shows that the monthly retail sales rate in February only increased by 0.2%, far below the expected 0.6%, and the January reading was revised down to a decrease of 1.2%, the largest decline since November 2022. In the sub item data, the sales revenue of catering services decreased by 1.5%, the largest decline since January 2024. The consumer confidence index has weakened synchronously, with data from the University of Michigan dropping to a two-and-a-half-year low in March, inflation expectations rising to 3.0%, and real interest rates remaining negative, strengthening gold’s anti inflation properties.

Geopolitical risks continue to escalate

The US military strike against the Houthi militants in Yemen continues to escalate, with the Houthi militants threatening to attack US warships, and the tense situation in the Red Sea driving up risk aversion. At the same time, the Trump administration’s policy of expanding tariffs has triggered global supply chain turbulence, and countermeasures from trading partners such as the European Union and Canada have intensified economic uncertainty. Institutional analysis indicates that the price increases and economic recession risks caused by the tariff war are driving investors to accelerate their allocation of gold.

Monetary policy shifts towards expectations

The market’s expectation of the Federal Reserve’s June interest rate cut has risen to 65%, and the US dollar index has fallen below the 104 level, weakening the opportunity cost of holding gold. The Federal Reserve will announce its interest rate decision and economic forecast this week, and investors are closely monitoring policymakers’ assessment of the current economic situation.

Technical and Market Structure Analysis

At the daily level, after the gold price broke through $3000, the RSI indicator briefly oversold and fell back to the neutral zone. The MACD red bar continued to enlarge, indicating that the medium to long-term upward trend has not changed. The short-term moving average system shows a bullish trend, but the divergence rate has increased, indicating the need for technical correction. The hourly chart shows that the gold price oscillates within the range of $2980-3004, and the contraction of the Bollinger Bands indicates that volatility may decrease. COMEX gold futures open contracts increased to 478000 lots, with speculative long positions accounting for 68%. We need to be cautious of short-term fluctuations caused by profit taking.

Market Outlook and Trading Strategy

Institutional viewpoint differentiation

UBS has raised its 2025 gold price target to $3200, believing that central bank gold demand (with a global central bank gold purchase volume of 1045 tons in 2024) and geopolitical risks will support gold prices in the long term. Goldman Sachs pointed out that if the Federal Reserve’s policy shift falls short of expectations, gold prices may fluctuate between $3100 and $3300. In the short term, the market needs to pay attention to Wednesday’s Federal Reserve decision and the Russia Ukraine talks between Trump and Putin.

Operation suggestions

Multi order strategy: Stabilize near $2992 after a pullback, take a light long position, stop loss at $2986, target at $3005-3012.

Short position strategy: If the gold price breaks below the support of $2980, follow up with a short position, stop loss at $2985, and target $2968-2958.

Risk Warning: The easing of geopolitical tensions or the release of hawkish signals by the Federal Reserve may trigger a pullback in gold prices. It is recommended to control positions and set stop losses.

The breakthrough of gold above the $3000 mark marks a new stage in safe haven asset allocation, but in the short term, we need to be vigilant about market sentiment fluctuations and policy changes. Investors can pay attention to the breakthrough direction of the $2980 support level and adjust their strategies flexibly.

Trading risk warning: Any investment carries risks, including the risk of financial loss. This suggestion does not constitute specific investment advice, and investors should make decisions based on their risk tolerance, investment goals, and market conditions.