As global financial markets face a new wave of geopolitical and economic uncertainty, gold — the world’s safest asset — has once again taken the spotlight, surging to a new all-time high.
On Thursday, the price of gold skyrocketed, marking a significant milestone in its history. Spot gold rose by 2.8%, reaching $3,168.26 per ounce, while at one point during the trading session, it touched a historic high of $3,171.49. Simultaneously, U.S. gold futures climbed by 3.5% to settle at $3,185.50 per ounce on the COMEX exchange.
Trade Tensions Drive Gold’s Rally
A key factor behind this sharp upward movement is the escalation of trade tensions between the United States and China. U.S. President Donald Trump announced a substantial increase in import tariffs on Chinese goods — from 104% to 125%. While tariffs on imports from several other countries have temporarily been reduced, this move has added complexity and uncertainty to the global trade landscape.
This announcement has triggered widespread concern among international investors, prompting a flight to safe-haven assets such as gold. According to Nikos Tzabouras, Senior Market Analyst at Tradu, “Gold has once again assumed its historical role as a safe haven for capital and is well on its way to reaching new records.”
Interest Rate Outlook and Dollar Weakness
Beyond trade disputes, recent U.S. economic data have also influenced the precious metals market. Contrary to expectations, the U.S. Consumer Price Index (CPI) showed a decline. However, analysts remain cautious, pointing to potential inflationary risks driven by higher import costs from China.
As a result, speculation is mounting that the Federal Reserve may begin cutting interest rates as early as June. Some market participants even suggest the possibility of a full percentage point reduction by year-end. Lower interest rates typically weaken the U.S. dollar and enhance gold’s appeal, as the opportunity cost of holding non-yielding assets like gold diminishes.
In tandem with these developments, the U.S. Dollar Index (DXY) dropped more than 1% against a basket of major currencies, making gold more attractive and affordable for non-dollar holders.
Central Bank Demand Adds Momentum
Another major driver behind gold’s surge is increasing demand from central banks around the world. Alex Ebkarian, Chief Operating Officer at Allegiance Gold, commented: “We are currently witnessing sustained gold purchases by central banks. As long as inflows into gold ETFs persist and uncertainty around monetary policies continues, multiple factors will support the bullish momentum in gold prices.”
Performance of Other Precious Metals
The rally wasn’t exclusive to gold, though other precious metals experienced mixed movements. Silver prices remained stable at $31.02 per ounce. Platinum saw a modest 0.3% increase to $940.24, while palladium declined by 1.5%, settling at $918 per ounce.
