Gold has passed $2,900 and is moving quickly toward the $3,000 mark. Physical gold demand in the U.S. is skyrocketing amid rising risks from a busy news cycle, driven by Trump’s ongoing policy maneuvers. The tariff policy is currently the number one concern for the global economy, with the risk of a trade war possibly at its highest level. 

Although it has been postponed for now, 25% tariffs on Canada and Mexico seem likely to be implemented. In addition, a 10% (for now) tariff on China, incoming EU tariffs, and a 25% (for now) steel and aluminum tariff suggest that the list may continue to grow. Markets remain uncertain about how much of this is a negotiation tactic versus an actual long-term policy shift. This rising uncertainty is driving higher demand for gold. 

Meanwhile, Trump’s Middle East threat triggered a temporary ceasefire in Gaza, but that now appears to be breaking down. Hamas has accused Israel of violating the ceasefire agreement and has put the hostage exchange process on hold. Trump advised Israel to give Hamas until Saturday to release all hostages, warning that if they do not, the deal should be abandoned altogether. These remarks have heightened the risk of further conflict in the Middle East, providing additional support for gold prices. 

(Comex Gold Inventory vs XAUUSD) 

The U.S. is also facing significant domestic political risks, including pressure on the Federal Reserve and other federal agencies, as well as the possibility of a government shutdown in March. Trump’s presidency began with multiple policy shocks, which markets perceived as risk factors, driving increased gold demand especially in the U.S. 

According to several reports, China’s gold demand is slowing due to high gold prices. Meanwhile, the UK is trying to keep up with soaring U.S. gold demand, shipping gold to the U.S. as quickly as possible. As a result, the lease rate on gold in the UK has been rising steadily. 

Additionally, COMEX gold inventory skyrocketed after the presidential election, showing the physical demand for gold, further driving gold prices higher. 

(XAUUSD Risk Reversals) 

In the options market, risk reversals still favor higher gold prices over the course of this year. Risk reversals measure the difference in implied volatility between out-of-the-money (OTM) calls and puts. 

In January, one-month and one-week risk reversals rose sharply, indicating increased demand for short-term upside protection. Meanwhile, the one-year risk reversal continued its downtrend but remains above zero in the short term. This suggests that short-term bullish pressure has increased, while medium- and long-term sentiment has remained relatively stable. 

Overall, the market still expects gold to rise over the next year, but the upward potential appears to be diminishing as prices continue to climb. 

(XAUUSD Weekly RSI and MACD) 

On the weekly chart, the RSI and MACD typically provide meaningful caution signals when price increases turn into FOMO (fear of missing out) rallies. 

For MACD, the 100 level is a key threshold, as it accurately predicted the 2011 and 2020 tops, signaling an impending pullback. In May of last year, a similar signal appeared. While it correctly marked a top formation, the expected retreat never materialized, and after some consolidation, another rally began. The second signal came at the end of October, again forming a top. However, after a brief correction, gold resumed its upward movement, aided by Trump-related factors. Now, MACD is once again approaching the 100 level. 

For RSI, the 85 level serves as the equivalent of MACD’s 100, with one exception in 2019. RSI is currently near 75. Both indicators are approaching overbought levels, suggesting a potential top formation, but neither has confirmed a signal yet.  
 
(XAUUSD Logarithmic Chart) 

Where Will Gold Make Another Top? Will Gold Rise Further? 

These are the key questions that metal traders are trying to answer. Gold is clearly in an uptrend, but measuring this trend is becoming increasingly difficult as momentum accelerates alongside rapid price increases. Because of this, it is more effective to analyze logarithmic scale trends rather than linear ones to better capture gold’s exponential growth. 

The 2018 uptrend line remains intact and is currently making a second attempt at the upper boundary of the trend channel. This upper resistance level stands at $2,950, where gold tested and reacted sharply today, dropping more than $30 within a few hours after hitting this level. For now, $2,950 is the key resistance to watch. 

However, gold has also formed a shorter-term uptrend (green) from the beginning of 2024. Even on a logarithmic scale, momentum appears to be increasing. If $2,950 resistance fails, the shorter-term trend channel could provide a new upside target. The upper boundary of this channel currently sits at $3,130 but is rising over time. 

Summary: 

Despite the recent price surge, upward pressure on gold remains strong. However, $2,950 and the psychological $3,000 level are the most critical resistance points to watch. At the same time, long-term indicators are nearing key overbought levels, signaling a potential top. If these resistance levels break, gold could soar above $3,130 in just a few weeks.