(Kitco News) - Gold smashed through new record highs this week as it neared the $3,000 mark, fueled by factors including tariff fears and strong underlying demand, according to Gary Wagner, editor of TheGoldForecast.com.
In a recent interview with Kitco News, Wagner noted that gold's recent rise follows a dip to around $2,650, which he predicted in a prior appearance. The current rally is "a new leg, and it followed the correction that we saw with gold trading down," Wagner said.
Wagner observes that traders are eager to buy any dips in gold prices, indicating strong market sentiment. Following Federal Reserve Chair Powell's testimony, "gold prices dipped, but traders quickly stepped in. They bought the dip," he said. "Traders are waiting for that dip so they can buy it and take advantage of it."
President Trump's 25% tariff on steel and aluminum contributes to inflation risks, increasing demand for gold as a safe haven. According to Wagner, "Tariffs evoke the possibility of inflation heating back up."
Gold has seen a significant rally, gaining approximately 14% since mid-December.
Psychological Levels & Potential Pullback
The price of gold is nearing the key psychological level of $3,000 per ounce. "Any of those big numbers – $1,000, $2,000, $3,000 are going to be key psychological levels," Wagner said. He believes reaching $3,000 is "not if, but when," adding, "I think relatively soon."
While gold is on a strong uptrend, Wagner acknowledges the possibility of a pullback or correction.
For more key levels, watch the video above.
He also observes that gold's current trajectory is "almost parabolic," which "always gives the potential for a hard correction, but we haven't seen it." Wagner added, "And the reason this time is different from other times where we would typically see a pullback much sooner is that the fundamentals driving this are strong."
Silver's Performance
In contrast to gold, Wagner remains "cautiously bearish" on silver. While silver has seen some price appreciation, it has not reached its all-time highs like gold. He points out that "silver has an industrial component that's greater than gold, but we can see that that's been tepid at best."
