Gold Under Threat? 5 Critical factors that could end gold’s 7-month rally

Jakarta, Pintu News – Gold is on the brink of history with the potential to record its eighth consecutive monthly gain, an unprecedented record. However, behind the euphoria, a number of major threats are looming and have the potential to stop the gold rally that has been excellent amid global economic uncertainty.

Analysts and economists warn that the market is now entering a critical phase, where the positive sentiment could change drastically due to pressure from various sides. This article will take an in-depth look at the main factors that could destabilize the gold market and end the positive trend that has lasted for the past seven months.

Gold Rally: Between Optimism and Global Economic Threats

The rally in gold prices that has occurred over the past seven months cannot be separated from the increasing global economic uncertainty. Many investors chose gold as a safe haven asset amid the slowing economic growth of the United States which only reached slightly above 2%, below the economy’s potential of around 2.5%. In addition, the unemployment rate continues to creep up and employment stagnation adds to concerns in the financial markets.

This has made gold increasingly attractive as a hedge against inflation and market volatility. However, Mark Zandi, Chief Economist at Moody’s Analytics, highlights that current asset valuations are already very high and driven by expectations of price increases alone. He emphasized that financial markets, including stocks, corporate bonds, and even cryptocurrencies such as Bitcoin and Ethereum , are vulnerable to a massive sell-off.

Inflation, which remains at 3% based on the personal consumption expenditure (PCE) index, also adds pressure to the market. If inflation continues to rise, the Fed is likely to delay rate cuts, which could trigger a sharp correction in the gold market.

Also Read: Elon Musk on Silver: 5 Facts, Opinions, and Impact on Precious Metal Prices

Geopolitical Turmoil and Financial Market Uncertainty

In addition to economic factors, geopolitical tensions are also a major catalyst for gold price movements. Conflicts involving the United States and Iran, as well as uncertainty due to new tariff policies, have made investors increasingly wary of risks in the global market. Bank of America through analyst Michael Hartnett even recommends trading oil for short-term gains from geopolitical turmoil, but still recommends holding gold as a long-term protection.

On the other hand, the US bond market is also facing great pressure due to the ballooning budget deficit and doubts about the safe haven status of Treasuries amid the deglobalization trend. Many hedge funds are capitalizing on the fragile bond market, and if there is a simultaneous sell-off, a spike in interest rates could occur at any time.

This could trigger high volatility in the gold market, as investors look for more stable hedging alternatives. Not surprisingly, central banks around the world are now adding more gold reserves than US bonds, for the first time since 1996.

Gold Supply Crisis in China and Risk of Price Correction

Another factor that helped strengthen the gold rally was the supply crunch in China after the Lunar New Year celebrations. Many gold shops in China stopped selling gold bars and even returned purchase contracts that were agreed upon before the holiday due to severe supply shortages.

This has prompted speculation that gold prices could surge to $10,000 per ounce in an extreme scenario, although analysts warn of a potential sharp correction in the event of massive profit-taking. Technical pressure is also a concern for analysts. Some technical analysts highlight an important resistance level around $5,160 and a critical gap at $5,100.

If the gold price fails to stay above this level, the potential for a sell-off will increase and the buying momentum could be halted. With the combination of high demand, geopolitical uncertainty, and a fragile market, future gold price movements are predicted to be very volatile and full of surprises.

Gold’s Future Amidst a Storm of Uncertainty

Although gold is still the top choice as a hedge asset, various external factors are beginning to threaten the continuation of its historical rally. Economic uncertainty, geopolitical turmoil, the supply crisis in China, and technical pressure are major challenges that investors should be aware of. If any of these factors trigger a massive sell-off, the upward trend in gold prices could be reversed in no time. Therefore, caution and diversification strategies are the key to dealing with gold market volatility going forward.

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This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Crypto trading activities are subject to high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying and selling Bitcoin and other crypto asset investments are the responsibility of the reader.

Reference

• BeInCrypto. Gold Rally Faces Threats From Resistance, US Treasuries, and China in 2024. Accessed on February 23, 2026