- Gold has breached the $3,000 per ounce level, marking a significant milestone in its upward trajectory, with a 14% increase in value in 2025 alone
- The metal's rapid climb from $2,500 to $3,000 in just 210 days reflects its momentum, with
- Despite potential short-term volatility, gold's next move will be determined by long-term fundamentals
Harare- Gold has breached the $3,000 per ounce barrier last week, marking a significant milestone in the precious metal's upward trajectory. Since crossing the threshold on March 14, gold has consistently traded above this level, with the LBMA Gold Price PM setting at $3000 on March 17.
Gold's climb to $3,000/oz is a testament to its enduring appeal as a safe-haven asset. The metal's value has increased by 14% in 2025 alone.
So, what does this milestone really mean? Depending on who you ask: a lot or not much at all. For us, there are interesting psychological and technical aspects about this triple-zero ending price that could influence gold’s short-term behaviour.
But the more meaningful and lasting dynamics are the ones behind gold’s performance over the past several months.
Gold reached more than 40 new all-time highs in 2024 and fourteen more so far this year. Its upward move has been no coincidence.
The focus isn’t just the number itself but the pace at which gold has reached it. The jump from US$2,500/oz to US$3,000/oz took just 210 days, a notably faster move that reflects the momentum gold has built over the past two years.
Comparing that to the approximate 1,700 days that gold took, on average, to achieve previous US$500/oz increments, makes the move stands out.
Historical price data shows gold has averaged 1,708 days to climb $500 increments, yet the latest jump took just 210 days. In fairness, gold had to double in price to go from US$500/oz to US$1,000/oz, while it only had to rise 20% to go from US$2,500/oz to US$3,000/oz.
To provide additional context, gold has increased nearly sixfold since December 2005, when it first reached US$500/oz, equivalent to an annualised return of 9.7%. Over the same period, the S&P 500 spot index has increased at a rate of 8.2% per year.
To take this relative movement into account, we look instead at how much gold has deviated from its 200-day moving average (200DMA). The recent rally has pushed gold’s price three standard deviations (3σ) above the long-term average spread of its 200DMA. Most recently, this extreme divergence was seen during the COVID-19 pandemic in 2020 when gold crossed US$2,000/oz and again around the time gold reached US$2,500/oz.
Following these moves there was a period of consolidation before the upward trend eventually resumed.
What’s next?
As the saying goes, “even strong rallies need to catch their breath.” Gold has remained, on average, above previous multiples of US$500/oz for nine days before pulling back. At the same time, however, gold has rebounded above the same level in just a few days four out of five times.
From a technical and positioning standpoint, if gold were to remain above US$3,000/oz over the next couple of weeks, it would likely trigger additional buying from derivatives contracts.
World Gold Council estimate there is roughly US$8bn in net delta-adjusted notional in options contracts from US gold ETFs that expired on 21st of March and US$16bn in options on futures that will expire on 26 March.
While this may create a slingshot effect, it could also trigger short-term-profit taking.
In view of the speed of gold’s latest move, it would not be surprising to see some price consolidation.
But despite potential short-term volatility, the most important determinant for gold’s next move is whether fundamentals can provide long-term support to its trend.
While price strength will likely create headwinds for gold jewellery demand, push recycling up and motivate some profit taking, there are many reasons to believe that investment demand will continue to be supported by a combination of geopolitical and geoeconomic uncertainty, rising inflation, lower rates and a weaker US dollar.
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