Gold prices surged to a historic intraday high of $2,840.70 per ounce on Thursday as geopolitical and economic uncertainties fueled demand for safe-haven assets. The precious metal's meteoric rise was driven by escalating trade tensions and shifting market expectations for U.S. monetary policy.
Gold Breaks Records as Investors Flee to Safety
On Comex, gold futures for April delivery climbed $46.90, or 1.7%, settling at $2,840.40 per ounce. The contract reached a peak of $2,840.70 during trading, surpassing the previous record of $2,801.70 set in late October.
Jim Wyckoff, senior analyst at Kitco.com, noted that market jitters surrounding President Donald Trump's trade policies have driven investors toward safe-haven assets like gold.
“The marketplace remains nervous regarding the new U.S. presidential administration’s trade and foreign policies — especially any new trade tariffs," Wyckoff stated.
Trade Tensions Escalate
President Trump's tariff threats against Canada, Mexico, and China remain a key source of market volatility. While many analysts expect the tariffs to be delayed, Chris Weston of Pepperstone emphasized the potential shock if the 25% tariffs are imposed as planned.
"Gold is a fair portfolio hedge against the risk the market is surprised and Mexico and Canada are hit with tariffs," Weston explained.
Federal Reserve Holds Rates Steady, Boosting Gold
The Federal Reserve's decision to maintain its benchmark interest rate on Wednesday further supported gold prices. Declining Treasury yields reduced the opportunity cost of holding non-interest-bearing bullion, making it more attractive to investors.
Konstantinos Chrysikos, head of customer relationship management at Kudotrade, highlighted weaker-than-expected U.S. GDP growth as another factor reinforcing expectations of future rate cuts.
"The data reinforced expectations that the Fed could consider future rate cuts to support the economy," Chrysikos noted.
Economic Uncertainty Drives Demand for Haven Assets
Market optimism around potential interest rate cuts over the course of 2025 remains a key tailwind for gold.
Pepperstone’s Chris Weston emphasized the Fed's “wait-and-see” approach but acknowledged that risks are skewed toward weaker job creation and inflation nearing target levels.
This environment has bolstered gold as a hedge against economic uncertainty, with futures recently trading near $2,790.80 per ounce, close to the previous record high of $2,826.30 set in late October.
Conclusion
Gold's ascent to record highs underscores investors' growing concerns over global trade tensions and economic uncertainty. With potential tariffs looming and expectations of rate cuts persisting, gold remains a favored asset for hedging market risks. As geopolitical and economic dynamics continue to unfold, the precious metal may see sustained demand in the months ahead.
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