Gold surged past the historic $3,000 per ounce mark last week, underscoring its role as a haven asset amid rising geopolitical risks, economic uncertainty, and shifting monetary policy expectations. The yellow metal has gained approximately 14% in 2025 so far, supported by stagflation fears, geopolitical tensions, and renewed concerns over U.S. trade policies.

Despite this significant rally, spot gold is trading flat at $2,988 per ounce to start the new week. The question now is whether this momentum will sustain in the coming weeks or if gold prices will consolidate around current levels.

Key Drivers of Gold’s Rally:

A. Stagflation and Recession Risks

The fear of stagflation—high inflation coupled with slowing growth—has been a major factor supporting gold’s rise. U.S. Treasury Secretary Scott Bessent acknowledged that while an outright recession is not guaranteed, economic adjustments are likely.

In March, U.S. consumer sentiment fell to its lowest level in nearly two and a half years, driven by concerns over rising inflation and the potential negative impact of President Donald Trump’s broad-based tariffs. These tariffs are expected to push consumer prices higher, weighing on economic growth. As inflation expectations rise, investors continue to seek refuge in gold, which traditionally serves as a hedge against inflation and economic turmoil. For those looking to capitalize on this trend, finding the best broker for gold trading is crucial. YaMarkets provides a seamless platform for trading gold with competitive spreads and expert insights.

B. Geopolitical Uncertainties & Safe-Haven Demand

Global geopolitical tensions remain elevated, further fueling demand for gold. The U.S. has vowed to continue striking Yemen’s Houthi rebels, who have been attacking commercial shipping routes, adding to regional instability in the Middle East. Meanwhile, Israeli airstrikes in Gaza have escalated, heightening concerns over broader conflicts.

On the other hand, there was some relief after Trump announced plans to speak with Russian President Vladimir Putin on Tuesday to discuss ending the war in Ukraine. Any progress in de-escalating the conflict could moderate gold’s upside momentum. However, until there is tangible evidence of geopolitical stabilization, gold is likely to remain in favor as a safe-haven asset.

C. Interest Rate Expectations & Federal Reserve Policy

Markets are closely watching the Federal Reserve’s upcoming monetary policy meeting on Wednesday. With gold being a non-yielding asset, its price is highly sensitive to interest rate expectations.

The key focus will be on the Fed’s updated dot plot and Chair Jerome Powell’s remarks. If the Fed signals a more cautious stance due to the uncertain economic outlook—especially considering the potential impact of trade tariffs—gold prices could receive further support. Consensus suggests that if the Fed upgrades its inflation forecast while maintaining a dovish tone on future rate cuts, gold could extend its rally towards the next resistance levels at $3,016 or even $3,030.

What’s Next for Gold?

Given the current macroeconomic backdrop, gold’s short-term trajectory will likely be influenced by:

1. Fed Meeting & Powell’s Guidance: Any hints of prolonged accommodative policy or concerns about economic uncertainty could push gold higher.
2. Trade War Developments: If Trump’s tariff policies worsen inflation expectations, gold may continue to strengthen.
3. Geopolitical Risks: Escalations in the Middle East or Ukraine could sustain gold’s safe-haven demand.

While the recent rally has been driven by uncertainty, a meaningful pullback cannot be ruled out if inflation data surprises on the downside or if geopolitical risks ease significantly. However, with fundamental drivers still intact, gold remains well-positioned as a hedge against economic and geopolitical instability.

For traders and investors, the $3,000 level represents both a psychological and technical milestone. A decisive break above could open doors for further gains, while a period of consolidation may provide new entry opportunities. YaMarkets stands out as the best broker for gold trading, offering industry-leading tools, expert market analysis, and seamless trading execution.

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