Gold prices soared to an all-time high on Friday, driven by escalating U.S. tariff concerns and investor demand for safe-haven assets. Spot gold touched a record $2,799.71 per ounce before settling at $2,794.61 by 0408 GMT. With a monthly gain of over 6%, gold is on track for its best performance since March 2024.
U.S. gold futures also edged higher, rising 0.2% to $2,826.90 per ounce. Investors are now keenly awaiting the December U.S. personal consumption expenditures (PCE) report, due at 1330 GMT, which could offer fresh insights into the Federal Reserve’s interest rate trajectory.
The rally comes as former U.S. President Donald Trump reiterated plans to impose a 25% tariff on imports from Mexico and Canada, heightening trade tensions. "Repeated tariff threats have fueled safe-haven flows into gold," said IG market strategist Yeap Jun Rong. He added that any downside surprise in the inflation report could lead to greater policy flexibility from the Federal Reserve, potentially accelerating rate-cut expectations and further supporting gold prices.
Fed Chair Jerome Powell recently stated that future interest rate decisions would depend on inflation and jobs data, leaving markets on edge regarding potential rate cuts. Analysts at BMI warned of significant volatility in gold prices in 2025, as the Fed may adopt a cautious approach to monetary easing.
Gold stocks in COMEX-approved warehouses have surged by 73.5% since late November, reaching 30.4 million ounces, reflecting growing investor interest.
“Further gains could be in store for gold if tariff threats transition from a bargaining tool to an economic reality,” said Tim Waterer, chief market analyst at KCM Trade, adding that prices could break above the $2,800 mark.
Meanwhile, other precious metals showed mixed performance. Spot silver fell 0.8% to $31.43 per ounce, while platinum edged up 0.2% to $968.84, and palladium slipped 0.2% to $987.06. Despite the daily dip, silver and platinum remained on track for weekly gains.
As global markets react to geopolitical and economic uncertainties, gold’s status as a safe-haven asset remains strong, with investors closely watching the Fed’s next moves.