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GOLD NEEDS A NEW CATALYST

Gold XAU= has been trading in a relatively narrow range since peaking in April, and while analysts expect the price to remain elevated, ramping up trade tensions or geopolitical escalation might be needed for new highs.

"We see both the macro drivers and geopolitical/political uncertainty supporting gold," writes RBC commodity strategist Allison Enck, who expects gold to trade in range of about $3,100/oz-$3,500.

"Even with President Trump saying he is 'not planning' to fire Powell, the outside pressure on him and the Fed’s independence is, indeed, another source of the risk and uncertainty that underpin our view for 2025," Enck adds.

Year-to-date, gold is up over 26.7%, outperforming the S&P 500 .SPX (+6.5%), STOXX 600 .STOXX (+7.5%) and even bitcoin (+26.2%).

But the rally in gold has stalled since the price hit a record just above $3,500 an ounce in April.

ING strategist Ewa Manthey believes the bullish drivers for the metal remain intact, such as central bank buying and safe-haven demand.

"With global trade risks likely to stay elevated, creating an uncertain market environment, safe haven demand is likely to remain a support factor," Manthey said in a note earlier this week.

"For now, gold is stuck in a range, in need of a fresh catalyst, and with trade and geopolitical tensions heating up again, it might not take much to reignite that rally."

(Samuel Indyk)

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