Gold has shaken off its late-2024 correction to surge higher toward the $3,000 level.
XAUUSD – Daily Chart
The price of XAUUSD has soared again from December lows near $2,600 to a current price of $2,906. A move to the $3,000 level soon would be the possible target.
Gold finished January at an all-time-high of US$2,812, up 8% for the month, adding another positive start to its strong January record. The all-time-highs were also made against all major currencies, resembling a global trend.
Chinese gold market activity appears to also have stayed true to a seasonal pattern and suggests there may be some follow-through into February. The European economy has settled but there is the potential that German elections could further pressure the US dollar.
The EU’s largest economy is heading to the polls on February 23 to elect a new parliament. The vote will likely trigger a change in national leadership, with Friedrich Merz’s conservatives in the top spot to lead the next government.
A big slowdown in the country’s prospects has hurt the larger eurozone economy and the current tariffs are a risk. A new leadership may help the economy to get started and move the country and region forward again.
It is interesting that gold is also surging despite the recent Gaza ceasefire and talk of peace talks for Ukraine and Russia. Donald Trump held two long phone calls with Vladimir Putin and Volodymyr Zelenskyy and said he would visit Russia and offered to host Putin in the US.
Negotiations would begin “immediately”, Trump said, as he bids to end the two country’s three year long war. He said it was impractical for the Ukraine to join NATO and it was unlikely to get all of its occupied land back.
The market may distrust a peace process and the precious metal continues to surge higher.
