(Kitco News) - The gold market reached a significant milestone last week as prices surged above $3,000 an ounce, setting a new record high. And while gold remains in a strong uptrend, one market strategist said investors should prepare for some consolidation.
In his latest research note published Friday, Ole Hansen, Head of Commodity Strategy at Saxo Bank, said he would not be surprised if gold prices tested initial support at $2,956 - or even $2,930 - as investors take some profits at what is seen as a key psychological level.
However, he added that he views any dip in the market as a buying opportunity and reiterated his 2025 price target of $3,300 an ounce. April gold futures last traded at $3,006.50 an ounce, relatively flat on the day.
Hansen noted that robust central bank demand, falling global interest rates, and geopolitical uncertainty have been the key factors driving gold’s unprecedented rally since February 2024. He pointed out that gold prices have risen 39% in the last 12 months and 14% since the start of 2025.
Hansen explained that gold’s rally has been turbocharged since the start of the new year. President Donald Trump has upended the world order, adding to global economic uncertainty and geopolitical turmoil. Hansen added that a perfect storm is brewing in the gold market.
“The resulting stock market correction, led by recently high-flying companies now facing a potential end to U.S. exceptionalism, has prompted overseas and U.S. investors to seek alternatives,” he said. “These factors have heightened stagflation risks—slowing growth, rising unemployment, and increasing inflation—potentially forcing the Federal Reserve to ease financial conditions. Markets now anticipate three 25-basis-point cuts by year-end, up from just one in January.”
Hansen pointed out that Western investment demand for gold has picked up as Trump’s trade war and tariffs on imported goods have weighed on equity markets. While gold prices are up 14% so far this year, the S&P 500 is down nearly 4%.
“Real asset money managers, particularly in the West, needed a strong stock market and economic slowdown scare to return to gold—and that’s happening now. Many exited in 2022 when the Fed’s rate hikes made gold’s carrying cost prohibitive, but concerns over stagflation leading to lower funding costs are drawing them back, albeit cautiously,” he said. “This demand appears broad, with funds rotating out of equities into short-term safe havens like U.S. Treasury bonds and gold.”
