Gold prices soared to a record high today (Thursday),
driven by mounting economic and geopolitical uncertainties. Fears of an
escalating trade war, spurred by U.S. President Donald Trump’s latest tariff
threats, have intensified safe-haven demand for the precious metal.
Spot gold hit an all-time high of $2,954.69 before
stabilizing at $2,930.19 per ounce, Reuters reported. With inflation concerns
rising and central banks increasing their gold purchases, investors are eyeing
even higher price levels in the coming months.
Trade War Fears and Inflation Concerns
Gold has gained 12% this year as investors seek
protection against global economic instability. Trump’s latest remarks about
imposing tariffs on lumber, automobiles, semiconductors, and pharmaceuticals
have reignited concerns over global trade disruptions.
The Federal Reserve’s latest meeting minutes revealed
that policymakers remain cautious about inflation, reinforcing expectations
that interest rate cuts may not come soon. This has further bolstered gold’s
appeal, as the non-yielding asset thrives in uncertain monetary environments.
Beyond geopolitical risks, central bank purchases
continue to support gold’s upward trajectory. Exchange-traded funds (ETFs) have
also seen three consecutive days of inflows, indicating growing investor
appetite for gold.
Increased demand from central banks and ETFs, coupled
with concerns over a prolonged trade war, has reportedly led Wall Street
analysts to raise their gold price forecasts.
Geopolitical Developments and Short-Term Movement
Although gold’s fundamentals remain strong, some
analysts caution that a potential peace agreement between Russia and Ukraine
could momentarily dampen safe-haven demand. However, some maintain that the
record high could hold for weeks, given the number of supporting factors.
Elsewhere, Bitcoin also considered a safe haven by some, has shown some heightened volatility in the recent past but remains below the $100,000 psychological level. At the time of this publication, the leading digital
asset changes hands for $97,626, representing a 1% and 25 increase in the past
day and week, respectively.
Today, #gold pared gains after reaching a record of US $2,954.84/oz, as traders booked some profits after US Treasury Secretary Scott Bessent dismissed speculation that the government might revalue its bullion holdings. Click to access.👉 https://t.co/b4YdexYYMN#goldprice pic.twitter.com/O3THL5S14b
— Prospect Ridge Resources (@ProspectRidgeBC) February 20, 2025
How High Can Gold Go?
Despite occasional pullbacks, analysts remain bullish
on gold’s long-term trajectory. UBS has set a peak forecast of $3,200 per ounce
later this year, while Goldman Sachs raised its 2025 outlook to $3,100, the
Barron’s reported.
If trade tensions persist and economic uncertainty
remains high, some analysts believe gold could reach $3,300 before the year
ends. With inflation risks, central bank demand, and ongoing geopolitical
tensions shaping market sentiment, gold’s rally may be far from over.
Investors continue to watch for developments in U.S. trade policy and Federal Reserve signals, as these factors will play a crucial
role in determining whether gold extends its record-breaking run.
This article was written by Jared Kirui at www.financemagnates.com.
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