Gold prices traded near last week’s record highs, supported by a weaker U.S. dollar and a notable surge in bullion-backed exchange-traded funds (ETFs), prompting expectations that the metal could soon reach $3,000 an ounce.
Spot gold held steady around $2,940 per ounce, maintaining its position after recording its eighth consecutive weekly gain—the longest streak since 2020, according to Bloomberg. This upward momentum has been fueled by a sharp increase in demand through ETFs, with holdings rising sharply last week, marking the largest jump since 2022.
The precious metal has reached new peaks this year, following a 27% increase in 2024, driven largely by growing concerns over U.S. President Donald Trump’s trade and geopolitical policies. Goldman Sachs raised its year-end target for gold to $3,100, citing central-bank buying and the continued growth of ETFs as key factors behind the rise.
Weakening Dollar and Economic Data Drive Gold Demand
The U.S. dollar fell on Monday after reports on Friday showed a slowdown in U.S. business activity and a decline in consumer confidence. At the same time, inflation expectations climbed, fueling predictions of additional rate cuts by the Federal Reserve. Market participants now expect the first rate reduction for 2025 to come in July, earlier than previously anticipated. Lower borrowing costs typically boost demand for gold.
This week, attention will shift to the Federal Reserve’s preferred inflation measure, due on Friday. Analysts expect inflation to slow to its lowest pace since June, but persistent price pressures could keep policymakers cautious about further rate cuts.
As of 3:27 p.m. in Singapore, spot gold was steady at $2,940.27 per ounce, while the Bloomberg Dollar Spot Index dipped 0.2% after three consecutive weeks of losses. Silver and platinum saw gains, while palladium edged lower.
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