Gold prices surged for a third consecutive day, setting a new all-time record above $3,200 an ounce, as a weakening U.S. dollar and the intensifying U.S.-China trade war heightened demand for the precious metal.
By 10:40 a.m. ET, spot gold had risen 1.6%, reaching $3,225.52 per ounce, after earlier hitting a peak of $3,244.10. Meanwhile, U.S. gold futures rose 2.1% to $3,245.60 per ounce in New York. Over the past three days, bullion has gained nearly 8%, reinforcing its status as a safe-haven asset amid market volatility.
The rally continued on Friday after China raised tariffs on U.S. imports to 125%, exacerbating tensions between the world’s two largest economies. Liu Yuxuan, a Shanghai-based precious metal researcher, remarked, “Gold is the best place to be in the market now. The unprecedented trade tension has deepened the distrust of the U.S. dollar, intensifying the demand for other safety assets.”
The U.S. dollar index also continued its downward trend, dropping to its lowest level in three years. Additionally, expectations of interest rate cuts by the U.S. Federal Reserve are supporting gold. A recent report showing cooling U.S. inflation has raised the likelihood of the Fed implementing multiple rate cuts throughout the year, further pressuring the dollar.
Tai Wong, an independent metals trader, commented to Reuters, “A minor correction for gold wouldn’t surprise, but the path forward is up and away as CPI and PPI give the Fed more room to cut and will keep downward pressure on the dollar.”
However, UBS analysts cautioned that certain factors, such as easing geopolitical tensions, improved trade relations, or a recovery in the U.S. economic and fiscal outlook, could limit gold’s upward trajectory.
So far this year, gold has risen over 20%, driven by central bank demand, expectations of U.S. rate cuts, and ongoing geopolitical uncertainties, propelling the metal to multiple record highs.
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