Gold prices shattered the $3,000 mark for the first
time on Friday as a wave of economic and geopolitical uncertainty sent
investors scrambling for safety, Reuters reported.
The precious metal’s meteoric rise has been fueled by
fears over U.S. trade policy, inflation concerns, and a volatile stock market.
With central banks ramping up purchases and expectations of Federal Reserve
rate cuts strengthening, gold’s rally shows no signs of slowing.
Spot gold climbed 0.1% to $2,991 an ounce by
mid-morning trading in New York, hitting a record high of $3,004.86 earlier in
the session. The rally has pushed prices up 14% year-to-date, following a 27%
surge in 2024.
Market Jitters Drive Gold’s Unstoppable Rise
Investors increasingly view gold as the ultimate hedge
against economic turmoil, with U.S. President Donald Trump’s tariff war
intensifying market instability.
The S&P 500 reportedly plunged into correction
territory, shedding $4 trillion in value over the past week, fueling a rush
into safe-haven assets. Gold’s ascent is not just a reaction to stock market
declines.
Central banks have been aggressively stockpiling
bullion, with China’s reserves increasing for a fourth consecutive month in
February. Exchange-traded funds (ETFs) have also seen surging inflows.
The SPDR Gold Trust (GLD), the world’s largest
gold-backed ETF, reported holdings reaching 907.82 metric tons in late
February, the highest since August 2023.
Central Banks and ETF Demand
Expectations of monetary easing by the Federal Reserve
are another key driver of gold’s momentum. The central bank has already cut
rates by 100 basis points since September, and traders now anticipate further
reductions starting in June.
A weaker dollar, historically inversely correlated
with gold, has provided further tailwinds. Analysts suggest that if the Fed
resumes aggressive rate cuts, gold could continue its rally. While many analysts remain bullish on gold, some warn
of a potential correction if trade tensions ease and equity markets recover.
However, institutions remain optimistic. Goldman Sachs
recently raised its year-end 2025 gold target to $3,100, while Macquarie
suggested prices could challenge $3,500 if the U.S. budget deficit worsens. With economic uncertainty lingering and central banks
continuing to buy, gold’s rally may still have room to run. Investors, for now,
remain firmly in safe-haven mode.
Gold prices shattered the $3,000 mark for the first
time on Friday as a wave of economic and geopolitical uncertainty sent
investors scrambling for safety, Reuters reported.
The precious metal’s meteoric rise has been fueled by
fears over U.S. trade policy, inflation concerns, and a volatile stock market.
With central banks ramping up purchases and expectations of Federal Reserve
rate cuts strengthening, gold’s rally shows no signs of slowing.
Spot gold climbed 0.1% to $2,991 an ounce by
mid-morning trading in New York, hitting a record high of $3,004.86 earlier in
the session. The rally has pushed prices up 14% year-to-date, following a 27%
surge in 2024.
Market Jitters Drive Gold’s Unstoppable Rise
Investors increasingly view gold as the ultimate hedge
against economic turmoil, with U.S. President Donald Trump’s tariff war
intensifying market instability.
The S&P 500 reportedly plunged into correction
territory, shedding $4 trillion in value over the past week, fueling a rush
into safe-haven assets. Gold’s ascent is not just a reaction to stock market
declines.
Central banks have been aggressively stockpiling
bullion, with China’s reserves increasing for a fourth consecutive month in
February. Exchange-traded funds (ETFs) have also seen surging inflows.
The SPDR Gold Trust (GLD), the world’s largest
gold-backed ETF, reported holdings reaching 907.82 metric tons in late
February, the highest since August 2023.
Central Banks and ETF Demand
Expectations of monetary easing by the Federal Reserve
are another key driver of gold’s momentum. The central bank has already cut
rates by 100 basis points since September, and traders now anticipate further
reductions starting in June.
A weaker dollar, historically inversely correlated
with gold, has provided further tailwinds. Analysts suggest that if the Fed
resumes aggressive rate cuts, gold could continue its rally. While many analysts remain bullish on gold, some warn
of a potential correction if trade tensions ease and equity markets recover.
However, institutions remain optimistic. Goldman Sachs
recently raised its year-end 2025 gold target to $3,100, while Macquarie
suggested prices could challenge $3,500 if the U.S. budget deficit worsens. With economic uncertainty lingering and central banks
continuing to buy, gold’s rally may still have room to run. Investors, for now,
remain firmly in safe-haven mode.
This post is originally published on FINANCEMAGNATES.
