The legend in the InstaSpot team!
Legend! You think that's bombastic rhetoric? But how should we call a man, who became the first Asian to win the junior world chess championship at 18 and who became the first Indian Grandmaster at 19? That was the start of a hard path to the World Champion title for Viswanathan Anand, the man who became a part of history of chess forever. Now one more legend in the InstaSpot team!
Borussia is one of the most titled football clubs in Germany, which has repeatedly proved to fans: the spirit of competition and leadership will certainly lead to success. Trade in the same way that sports professionals play the game: confidently and actively. Keep a "pass" from Borussia FC and be in the lead with InstaSpot!
Gold was not a market favorite following Donald Trump's victory in the November elections. In fact, it pulled back once the red wave became clear and the Republican's return to the White House appeared imminent. Many investors believed that deregulation and tax cuts were a direct path to a stronger U.S. dollar and a rally in Treasury yields. However, by spring it became clear that the 47th president of the United States is a dangerous man doing dangerous things. All the better for the precious metal, which typically rises in anticipation of disruptive events in financial markets.
And the disruptions didn't take long to arrive. Trump's announcement of a 25% tariff on foreign cars dealt another blow to the S&P 500 and reignited demand for XAU/USD. Goldman Sachs immediately raised its gold forecast from $3,100 to $3,300 by the end of 2025, citing strong capital inflows into ETFs and insatiable demand from central banks. In response to the West freezing Russia's gold and foreign currency reserves, central banks have increased their gold purchases fivefold since 2022. Holdings in specialized exchange-traded funds (ETFs) have grown by 154 tonnes since the beginning of the year.
Gold and ETF Holdings Dynamics
In truth, gold simply knows the system very well. Its flow from Europe to the U.S. on the back of tariff expectations from the White House triggered a record U.S. trade deficit in January of $155.6 billion. And the situation didn't improve in February. According to Santander US Capital Markets, the negative trade balance is projected to reach $162 billion. Gold exports from Switzerland—a key transit point between the Old and New Worlds—reached 147.4 tonnes in February, the second-highest monthly volume on record after January's 193-tonne peak.
As a result, net U.S. exports are falling deep into negative territory, which is contributing to a sharp economic slowdown. Early estimates from the Atlanta Fed's GDPNow indicator suggested a 2.8% contraction in GDP for Q1. These have since been revised to just +0.2%, a stark contrast to the 3% economic expansion seen throughout most of 2024. That's bad news for markets—but good news for gold.
Switzerland's Gold Exports to the U.S.
The closer the U.S. gets to recession, the more reasons there are to buy XAU/USD. The worse the global economy performs due to the White House's protectionist policies, the better gold tends to do. In this regard, the return of Donald Trump—a dangerous man doing dangerous things—to power creates a strong tailwind for the precious metal. Who knows, perhaps gold will aim for $4,000 per ounce, as forecast by Societe Generale.
Technically, on the daily chart, gold is showing a recovery of its uptrend following a minor pullback. A breakout above resistance at the pivot level of $3,045 per ounce would justify opening long positions. Targets for these positions lie at $3,105 and $3,135.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
InstaSpot analytical reviews will make you fully aware of market trends! Being an InstaSpot client, you are provided with a large number of free services for efficient trading.
