Gold prices hit record high amid economic instability and tariff concerns
Kumar Shivam | Feb 01, 2025, 01:57 IST
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Gold prices have reached record highs, driven by concerns over U.S. President Trump’s tariff plans and economic uncertainty. Analysts predict further increases, with gold possibly hitting $2,900 or even $3,000 this year. The surge is fueled by inflation fears, trade war concerns, and the Federal Reserve’s pause on rate cuts, making gold an appealing safe haven for investors.
old prices have surged to record highs as investors flock to the precious metal in response to growing concerns about U.S. President Donald Trump’s tariff plans and broader economic instability, according to Reuters.
Spot gold reached a historic high of $2,817.23 per ounce on Friday.
What are analysts saying?
Analysts suggest that gold prices may continue to rise. Bob Haberkorn, a senior market strategist at RJO Futures, stated that gold could reach $2,900 in the first quarter and possibly even hit $3,000 later this year.
The surge in gold prices is largely attributed to Trump’s plans to impose a 25% tariff on imports from Mexico and Canada, sparking fears of inflation and trade wars.
Gold is often seen as a safe haven during times of uncertainty, and growing inflation fears are pushing investors toward the metal to hedge against risks.
Philippe Streible, chief market strategist at Blue Line Futures, explained that high inflation combined with slowing growth could lead to stagflation, a scenario in which gold historically performs well. This makes gold even more appealing to investors seeking stability in uncertain times.
Gold futures in the U.S. are trading at a premium, and major deliveries to U.S. COMEX-approved warehouses have increased stocks by 73.5%, reaching 30.4 million ounces, the highest level since mid-2022, according to Reuters.
Further supporting gold is the Federal Reserve’s pause in interest rate cuts. Since gold doesn’t offer yield, it tends to perform well in low-rate environments. Additionally, China has been quietly increasing its gold reserves, a move that should continue to support prices.
Spot gold reached a historic high of $2,817.23 per ounce on Friday.
What are analysts saying?
Analysts suggest that gold prices may continue to rise. Bob Haberkorn, a senior market strategist at RJO Futures, stated that gold could reach $2,900 in the first quarter and possibly even hit $3,000 later this year.
The surge in gold prices is largely attributed to Trump’s plans to impose a 25% tariff on imports from Mexico and Canada, sparking fears of inflation and trade wars.
Gold is often seen as a safe haven during times of uncertainty, and growing inflation fears are pushing investors toward the metal to hedge against risks.
Philippe Streible, chief market strategist at Blue Line Futures, explained that high inflation combined with slowing growth could lead to stagflation, a scenario in which gold historically performs well. This makes gold even more appealing to investors seeking stability in uncertain times.
Gold futures in the U.S. are trading at a premium, and major deliveries to U.S. COMEX-approved warehouses have increased stocks by 73.5%, reaching 30.4 million ounces, the highest level since mid-2022, according to Reuters.
Further supporting gold is the Federal Reserve’s pause in interest rate cuts. Since gold doesn’t offer yield, it tends to perform well in low-rate environments. Additionally, China has been quietly increasing its gold reserves, a move that should continue to support prices.