Trading Update 27th April 2025

Why Gold Hit Record Highs and Pulled Back This Week

Spot Gold Price Movements

The past week saw some incredible action in the gold market. Spot gold began the week by smashing through previous records, rising to $3,391.62 per ounce on 21st April. On 22nd April, it soared even higher, reaching an impressive $3,500.05. This two-day rally reflected heightened safe-haven demand as global economic and political tensions flared.

However, midweek brought a notable pullback. By the end of 22nd April, gold eased by around 1.5%, settling near $3,372.68 per ounce. The drop continued on 23rd April, when gold slipped another 2% to $3,318.71. Traders took profits and responded to signs of a slightly stronger U.S. dollar and calming political statements.

Towards the end of the week, gold staged a modest recovery. On 24th April, it rose 1.4% to around $3,333.90, as bargain hunters stepped in. Yet, fresh optimism over potential trade developments caused gold to dip again on 25th April, finishing near $3,302.81. By the weekend, spot gold stabilised around $3,349, with market sentiment remaining cautious but resilient.

Political Drivers of Gold Prices

Political events primarily drove the week’s gold price movements. Trade tensions between the United States and China were again front and centre. Early in the week, escalating rhetoric kept investors firmly positioned in safe-haven assets like gold. As discussions progressed, hopes for a trade resolution began to soften the mood, pressuring gold slightly lower.

Another key driver was commentary around the U.S. Federal Reserve. Political criticism of the Fed’s policies added volatility to the dollar, boosting gold prices early in the week. As political leaders moderated their comments later, the dollar regained strength, causing some selling pressure in bullion.

Global growth concerns also played a significant role. The International Monetary Fund lowered its forecast for global growth in 2025, raising fears of a slowing world economy. Recession worries provided solid underpinnings for gold’s resilience, even when temporary market optimism led to minor pullbacks.

Impact on Stock Markets

The stock markets responded sharply to the shifts in the gold market and broader political landscape. Early in the week, U.S. equity markets bounced strongly. Hopes of progress in trade talks and calming Federal Reserve news lifted the S&P 500 by over 2% on 22nd April. The Nasdaq and Dow Jones saw similar strong advances.

In the UK, the FTSE 100 rose 0.3% on 22nd April. Precious metal miners were among the top performers, buoyed by gold’s sharp rise. Companies linked to gold production enjoyed their best trading days in years as spot gold touched record highs. Consumer staple stocks also benefited as investors sought more defensive sectors.

Across Europe, the mood was cautiously optimistic. Many futures markets followed the U.S. higher, although some sectors lagged due to mixed earnings reports. Precious metal miners and gold-linked ETFs enjoyed a wave of investment as traders hedged against political risks.

Asian markets followed the broader global sentiment. Stock indices globally posted weekly gains, boosted by hopes of eased trade tensions. Meanwhile, gold ETFs saw steady inflows, as investors continued to favour diversification even as equities rallied.

How Gold Traders Are Positioning

Gold traders remained highly reactive throughout the week. Many short-term spread bettors capitalised on the sharp rallies early in the week, locking in profits when gold showed signs of exhaustion. Technical traders paid close attention to resistance levels around $3,500 and support near $3,300.

Fundamentally, traders’ sentiment remained bullish. Investment banks lifted their gold forecasts for the rest of 2025, with many seeing the metal reaching above $3,700 if current trends continue. Safe-haven buying from central banks and geopolitical tensions are expected to support gold prices.

Technical indicators showed that gold entered overbought territory after the two-day surge. This triggered short-term corrections but did not change the broader bullish trend. Support zones around $3,145 and $2,955 are key areas where fresh buying could emerge if further pullbacks occur.

Traders are advised to monitor dollar movements and economic releases closely. U.S. PMI data and upcoming Federal Reserve speeches could inject fresh volatility into the market. Spread bettors may find opportunities on dips and breakouts, but given the sharp swings in sentiment, they should maintain tight risk controls.

What to Watch Next

Looking ahead, the market focus is shifting to several key catalysts. Comments from Federal Reserve officials will be closely scrutinised for any hints about interest rate direction. A dovish tone could lift gold further, while hawkish remarks might strengthen the dollar and pressure bullion lower.

Trade talks between the United States and China remain a wildcard. Any surprising positive or negative developments could cause sharp movements in both gold and equity markets. Traders should also watch for any changes in tariffs or trade policy announcements.

Broader economic data will also play a role. Soft economic figures, particularly in manufacturing and services, could renew fears of a global slowdown and add fresh support to gold. Conversely, stronger-than-expected data might weigh on safe-haven demand.

In the short term, gold prices will likely remain range-bound between $3,300 and $3,500. Breaks above or below these levels could set the tone for the next significant move. Discipline and agility will be key for traders looking to navigate these volatile conditions successfully.