Gold prices have soared to unprecedented levels, fueled by geopolitical uncertainty and growing inflation fears. Yesterday, the price of gold reached new record highs, driven by escalating concerns about the impact of U.S. tariff policies.
In a notable development, the price of 31.1 grams (one ounce) of gold surpassed $2,900 on the London exchange for the first time. Late in the morning, it was trading at $2,906.30 per ounce. A year ago, the same amount of gold was valued at approximately $2,000. Since mid-December, the price has steadily risen, increasing by about 12%.
Gold prices also hit a record high in euros. As of yesterday, one ounce was priced at €2,814.35, the highest level ever recorded.
Safe Haven Investment
“The latest tightening of U.S. trade policy is creating uncertainty in the markets,” said Alexander Zumpfe, a precious metals trader at the German firm Heraeus. He noted that this uncertainty has led to a surge in demand for gold, which is traditionally viewed as a safe investment during times of economic instability.
Over the weekend, U.S. President Donald Trump announced plans to impose a 25% tariff on all imports of steel and aluminum into the U.S., with more details expected to be revealed early this week.
Ricardo Evangelista, an analyst at Luxembourg-based ActivTrades, identified two main factors contributing to the increased demand for gold: concerns about the potential effects of the new U.S. administration’s protectionist policies on the global economy and rising inflation in the U.S. Many investors view gold as a reliable hedge against inflation.
Central Banks Boost Gold Reserves
Zumpfe also highlighted the continued demand for gold from central banks, which have been increasing their reserves to reduce reliance on the U.S. dollar as the global reserve currency. He noted that China’s central bank added to its gold reserves again in January.
If geopolitical tensions persist and inflation concerns continue to rise, gold prices could continue their upward trajectory. “We believe the price could rise to the psychologically significant level of $3,000 per ounce,” Zumpfe added.
Related topics:
- India Surpasses China in Gold Purchases, Buying 51% More in Three Months
- Gold Rates Skyrocket in Chennai on Diwali, 24K Gold Exceeds Rs. 81,000 Per 10 Grams
- Maryland Considers Exemption for Insurance Premium Loans in New Disclosure Law
