Gold may be entering its final blow-off phase after record

After breaching $3,200 an ounce last week for the first time, gold prices appear to be in a climatic blow-off phase, with a brief spike above $3,300 likely before a significant correction between 10 per cent and 20 per cent, according to market analysts.

- Issac John [e-mail]

The current volatile landscape has been largely influenced by the economic uncertainty stemming from US President Donald Trump's controversial tariff policies, which have sent shockwaves through global financial markets.

Initially dipping below $3,000 in the wake of tariff announcements, gold quickly reversed course, climbing significantly as investors flocked to the precious metal, traditionally viewed as a safe haven during turbulent times. This price movement has also buoyed gold miners, who experienced a turbulent week with swings of up to 15 per cent, ultimately finding new highs amidst the chaos. However, precious metal analysts caution that this current breakout may not be sustainable, warning that those chasing the recent price surge could find themselves ensnared in a typical bull trap.

Year-to-date, gold prices have soared by more than 22 per cent, prompting financial institutions like UBS and Commerzbank to revise their forecasts upwards. These adjustments reflect a broader trend wherein investors are increasingly turning to gold as a hedge against the uncertainties created by Trump’s aggressive trade policies.