Gold prices have breached the psychological $3,000 an ounce mark as geopolitical and economic uncertainty increasingly drives investors to safe havens.
Spot gold hit an all-time high of $3,004.86 an ounce on Friday, its 13th high this year, according to Reuters. The price has already risen 14% this year, after a 27% surge in 2024.
Central bank demand boom
“As central banks continue to buy gold, there are a number of factors supporting demand,” said Suki Cooper, an analyst at Standard Chartered. “Against geopolitical uncertainty and tariff changes, appetite for gold remains strong.”
Donald Trump’s protectionist policies have rattled global markets, with his tariffs prompting retaliation from China and Canada. John Ciampaglia, CEO of Sprott Asset Management, expects Western investors to return to gold, which could push the price higher. “Gold is a hedge and a source of liquidity in difficult market phases,” he points out.
Traders and investors are stocking up
In COMEX-approved warehouses to a record 40.56 million ounces. Traders are rushing to protect themselves as tariff uncertainty grows.
Gold exchange-traded funds (ETFs) saw their biggest weekly inflows since March 2022, according to the World Gold Council. SPDR Gold Trust (GLD), the world’s largest gold-backed ETF, reported on February 25 that holdings rose to 907.82 metric tons — the highest level since August 2023.
“There will continue to be strong inflows into safe-haven assets like gold given the uncertainties and concerns about the future,” says Dina Ting, head of global index portfolio management at Franklin Templeton. A 5-10% allocation to gold could be an effective diversification strategy.
Gold price could continue to rise
Demand from central banks is giving the rally a new impetus. Massive purchases in 2025 could push prices to new highs as countries hoard gold as a hedge against economic uncertainty. If the US budget deficit does not improve, Macquarie Group predicts that the price of gold will rise to $3,500.
Central banks bought more than 1,000 tonnes of gold in 2024 for the third year in a row. When Trump’s election victory shook markets, purchases increased by 54% compared to the previous year.
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