Eric Sepanek
SBC Founder
Eric Sepanek is the founder of Scottsdale Bullion & Coin, established in 2011. With extensive experience in the precious metals industry, he is dedicated to educating Americans on the wealth preservation power of gold and silver.
Gold has been stuck in a tight trading range since hitting an all-time high in April, but a growing consensus suggests the yellow metal is primed for a breakout. Instead of preparing for a downturn, gold’s price action indicates a period of consolidation as bulls prepare for the next leg up.
A mix of Federal Reserve hesitation, contradicting economic data, and dampened buying has placed a temporary lid on gold’s rally. However, experts anticipate a long-awaited rate slash in September and renewed investment demand to propel gold to record peaks.
Gold’s Fast Climb and Sudden Stall
Gold began the year around $2,624/oz, then shot up to $3,500/oz by April 22, 2025—a 33% leap in under four months, outpacing 2024’s roughly 26% full-year gain. Following this record ascent, gold settled into a tight trading range between around $3,300/oz and $3,500/oz for the past few months.
Consolidation, Not a Correction
Although some investors feared this plateau signaled the top of the bull market, analysts are striking a much more optimistic tone. Instead of a downturn, experts say this rangebound movement is consolidation—a brief pause in an uptrend before a potential breakout. In other words, the years-long gold rally is simply taking a breather, not reversing.
Technical analysts, who study historic chart patterns to anticipate future moves, note that gold is forming an ascending triangle. This optimistic technical indicator is typically seen before a range-bound asset clears a temporary price ceiling and surges upward.
Why Gold Hasn’t Broken Free…Yet
Fed Delay Keeps Gold Waiting
Generally, easing cycles are tailwinds for gold as dollars divert away from yielding assets as returns diminish. Gold and other precious metals usually see an equal but opposite boost in demand. However, the volatile economic climate has forced a long pause on rate cuts, dampening the gold-positive impact.
Mixed Signals Cloud the Outlook
Trump’s unprecedented trade policy intervention has cast a shadow of uncertainty over the economy. This lack of clarity is exacerbated by mixed macro signals, suggesting markets are teetering on the edge of continued growth and fiscal decline. The muddied economic outlook had kept investors on their toes, muting gold demand.
Cooling Demand, Lasting Support
Gold prices also felt the weight of softer demand in Q2. Central bank purchases dropped from 243 tons in Q1 to 166 tons in Q2, while jewelry fabrication saw notable declines in both China and India, two of the world’s largest consumers. These pullbacks added a cap on upward momentum.
Post-Surge Profit Taking
Gold’s pause after hitting its $3,500/oz record high was no accident. Many short-term and speculative traders used the rally to lock in gains, releasing fresh supply into the market. While this wave of profit-taking briefly weighs on prices, it also clears out weaker hands, laying the groundwork for stronger, more sustainable momentum ahead.
Gold’s Breakout Catalysts
Rate Cuts Could Unlock the Rally
After an eight-month pause, the Fed is widely expected to resume rate cuts in September, with markets pricing in a mid-80% chance of a 25-basis-point reduction. Additional cuts are likely to follow through Q4 and into 2026.
A clearer policy path would give investors the confidence to pivot away from traditional interest-bearing assets and toward non-yielding stores of value like gold.
Recession Fears Linger Beneath the Surface
While the stock market marches to fresh records, pockets of less-favorable economic data weigh on forecasts. Stubborn inflation, rising prices, and a mounting debt burden keep recession fears alive.
Although reduced from earlier in the year, J.P. Morgan still sees a 40% chance of a recession in 2025. These rising concerns, and even some stagflation warnings, keep gold consumption high. In the event of a serious downturn, demand could rise considerably.
Gold Shifts From Trend to Bedrock
Gold demand has always risen and fallen with the times, but the past few years of unprecedented, steady central bank buying mark a fundamental shift. Gold is no longer cyclical; it’s systemic.
In fact, over the past year, gold surpassed the euro to become the second most widely held reserve asset, and the global banking system now recognizes it as a Tier 1 asset, putting it on par with US Treasuries and the dollar.