Gold prices surged to a new record high on Thursday, fueled by growing economic and geopolitical uncertainties. The price of spot gold reached an all-time peak of $2,954.69 per ounce before settling at $2,930.19, according to Reuters. This sharp rise is largely attributed to the escalating tensions in global trade, particularly following U.S. President Donald Trump’s recent tariff threats, which have sparked increased demand for gold as a safe-haven asset.
Trade War Fears and Inflation Concerns Drive Demand
Gold’s rise comes as investors seek to protect their wealth from the growing risk of global economic instability. So far this year, the precious metal has gained 12%, with fears of an intensified trade war contributing to its appeal. Trump’s remarks about potential tariffs on goods including lumber, automobiles, semiconductors, and pharmaceuticals have raised fresh concerns over disruptions in global trade.
Meanwhile, the U.S. Federal Reserve’s recent meeting minutes revealed a cautious stance on inflation, further fueling expectations that interest rate cuts may not be forthcoming. This environment of uncertainty boosts the appeal of gold, which performs well in times of low yields and monetary unpredictability.
In addition to these concerns, central banks have been increasing their gold purchases, further driving up demand. Exchange-traded funds (ETFs) have also seen a rise in inflows, with three consecutive days of gains reflecting growing investor interest in the asset.
Geopolitical Factors and Market Sentiment
Geopolitical risks, notably the ongoing tensions surrounding Russia and Ukraine, continue to influence gold’s price. However, some analysts caution that any potential peace agreement between the two countries could temporarily reduce safe-haven demand for the precious metal. Despite this, many experts believe that gold’s record price may hold steady for the foreseeable future, supported by a variety of factors.
In contrast, Bitcoin—often viewed as another safe haven—has seen volatility recently but remains below the key $100,000 threshold. As of publication, the leading cryptocurrency was priced at $97,626, reflecting a 1% increase in the past 24 hours and a 2% gain over the past week.
Gold’s Long-Term Outlook
Despite the possibility of short-term fluctuations, analysts remain optimistic about gold’s long-term prospects. UBS has projected that the metal could peak at $3,200 per ounce later this year, while Goldman Sachs has raised its 2025 price target to $3,100. If trade tensions persist and economic uncertainty remains elevated, some analysts believe that gold could reach as high as $3,300 before the year ends.
With inflation risks, continued central bank demand, and geopolitical tensions shaping market sentiment, gold’s rally may have further to go. Investors are closely monitoring U.S. trade policies and signals from the Federal Reserve, as these factors will play a crucial role in determining whether gold can extend its record-breaking run.
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