Gold surged past the monumental $3,000 per ounce threshold for the first time ever on Friday, continuing its record-breaking rally as investors sought refuge from economic uncertainty. The precious metal climbed 2.94% in morning trading to reach $3.85 per ounce, just a day after surpassing its previous high from late February. Spot gold was up 0.4% at $3,000.87 an ounce as of 10:15 GMT, while U.S. gold futures rose 0.7% to $3,013.60.
Bullion has shattered 13 all-time highs in 2024 alone and is on course for a second consecutive week of gains. Analysts cite a mix of geopolitical concerns, Federal Reserve rate cut expectations, and economic instability as key drivers behind gold’s meteoric rise.
“Gold still has plenty of catalysts pushing it higher, from geopolitical risks to economic uncertainty and potential Fed rate cuts,” said Han Tan, chief market analyst at Exinity Group.
Thomas Kertos, co-portfolio manager at First Eagle Investment Management LLC, highlighted gold’s resilience over time. “Gold has consistently maintained its value over centuries despite its volatility. It maintains purchasing power and provides liquidity, making it a safe-haven asset,” he told Bloomberg News.
Defying Market Trends
Remarkably, gold’s rally has occurred despite traditionally unfavorable conditions, including rising interest rates and a strong U.S. dollar. Typically, higher bond yields and a stronger dollar reduce gold’s appeal, as the metal does not generate interest. Yet, gold has continued its ascent, demonstrating its enduring status as a safe-haven investment.
Trump’s Tariffs and Market Jitters
Investor demand for gold has intensified due to escalating trade tensions. President Donald Trump’s recent tariff threats, including a proposed 200% tariff on European alcohol imports, have rattled markets and heightened fears of a prolonged trade war. These uncertainties have driven more investors toward gold as a hedge against volatility.
Meanwhile, SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), reported holdings of 905.81 metric tons, marking its highest level since August 2023.
Looking Ahead: Fed’s Next Move
On the macroeconomic front, U.S. inflation data released Wednesday showed a larger-than-expected cooling in consumer prices, raising hopes for Federal Reserve rate cuts. The Fed’s upcoming meeting on Wednesday is expected to leave interest rates unchanged, but investors are closely watching for signals on future cuts.
“Next week’s FOMC decision and Fed Chair Jerome Powell’s comments will determine whether gold sustains its position above the $3,000 level,” noted Tan.
Traders currently anticipate rate cuts to resume in June, further supporting gold’s upward trajectory. Analysts at ANZ remain bullish, predicting gold prices could hit $3,050 per ounce in 2025.
Other Precious Metals Movement
Silver followed gold’s upward momentum, adding 0.4% to $33.94 an ounce. Meanwhile, platinum dipped 0.5% to $989.04, and palladium edged up 0.3% to $960.71.
