Gold prices hit a record US$5,026 per ounce amid global uncertainty driven by Trump’s policies, trade war fears, and central bank demand
LONDON: The price of gold has surged past the US$5,000 (RM20,017) per ounce mark for the first time, setting a new record.
The safe-haven asset reached $5,026 an ounce in trading on Sunday, following sister metal silver’s breakthrough above $102 an ounce on Friday.
This milestone comes amid rising global uncertainty linked to US President Donald Trump’s policies.
Analysts point to recent turbulence over Trump’s ambitions for Greenland and pressure on the Federal Reserve as key recent supports for the precious metal.
Gold has achieved a series of all-time highs over the past two years due to multiple factors.
These include a weak US dollar, strong central bank demand, and elevated inflation.
The price has also been driven higher by the wars in Ukraine and Gaza, alongside Washington’s intervention in Venezuela.
Gold stood at just above US$2,000 an ounce in January 2024.
“Over the past few days, gold’s price action has been textbook safe-haven behaviour,” said Fawad Razaqzada, a market analyst at Forex.com.
He noted that underlying demand for protection remains strong, with confidence in the dollar and bonds looking “a bit shaky.”
Trump backed away last week from threatened tariffs on several European nations over their opposition to a US seizure of mineral-rich Greenland.
His comments nevertheless triggered a transatlantic crisis, reviving trade war fears and investment uncertainty.
The dollar plunged to a four-month low against the euro as gold prices surged.
“Gold pressed on to a fresh record high as geopolitical tensions remain elevated,” noted Neil Wilson, an investor strategist at Saxo UK, on Friday.
He said markets were pricing in worries about an escalatory trade war, rather than the extreme risk of US military intervention in Greenland.
Investors are also preparing for this week’s Federal Reserve policy meeting.
The meeting follows US prosecutors taking aim at Fed Chair Jerome Powell, raising fears over the central bank’s independence.
Trump has repeatedly expressed disdain for Powell, questioning his competence and claiming there is “no inflation.”
Major central bank heads threw their support behind the Fed and Powell last week after US prosecutors issued subpoenas against him.
“Add in lingering doubts around central bank independence and you are left with a slow-burning support base for gold,” said independent analyst Stephen Innes.
The World Gold Council reported that gold demand by value surged 44% year-on-year to a record $146 billion in the third quarter of last year.
Strong demand has also been seen via gold Exchange-Traded Funds (ETFs) on stock markets.
