Gold prices have surged to record levels exceeding $3,100 per ounce, marking one of the most significant upswings in the precious metal's history, driven by various factors including concerns over the implications of impending U.S. tariffs.
Spot gold reached a high of $3,128.06 per ounce.
The uncertainty surrounding U.S. tariffs has intensified the momentum pushing gold prices higher, alongside strong demand from central banks, expectations of interest rate easing by the Federal Reserve, geopolitical instability in the Middle East and Europe, and increasing investments in gold-backed exchange-traded funds.
Bullion is on track for its largest quarterly increase since September 1986 and has already hit 19 all-time highs in 2025, with seven surpassing the $3,000 mark.
Prices have risen 18% this year, following a 27% increase in 2024.
"Gold's rally has been fueled by escalating geopolitical tensions, inflation concerns, and robust investor demand. Given the current macroeconomic environment—particularly trade war uncertainties and central bank policies—this trend seems sustainable in the near term," stated Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany.
Further adding to the tension, the U.S. is expected to announce reciprocal tariffs, while automobile tariffs are set to take effect shortly.
"Geopolitical uncertainty remains high, with ongoing hostilities in the Middle East and no clear resolution to the Russia-Ukraine conflict. Recent comments from Trump concerning Russia, Iran, and Greenland have intensified geopolitical strains, enhancing gold's appeal," remarked Nikos Tzabouras, senior market analyst at Tradu.com.
Last year, gold experienced its best annual performance since 2010 due to market participants flocking to the safe-haven asset amid escalating geopolitical turmoil stemming from conflicts in the Middle East and Europe, coupled with economic uncertainties following Trump's election and his proposed tariffs.
Another significant factor driving the surge was the Federal Reserve's rate easing policy, which included a 50 basis point cut in September. Fed officials anticipate further reductions by year-end.
"While increasing gold purchases may reduce central banks' overall dollar exposure, we do not believe this surge in demand indicates a severe loss of confidence in the greenback," analysts at Capital Economics stated.
"Rather, the perception of gold as a safe haven is likely the main factor driving central bank demand. We expect official sector purchases to support gold prices, projecting a rise to an above-consensus $3,300 per ounce by the end of 2025."
Investor interest in gold is rising, as indicated by the significant inflows into ETFs, which recorded their largest weekly inflow since March 2022, reflecting a renewed rush toward the precious metal.
"North American ETFs have seen inflows, but the overarching trend suggests increasing demand from European investors seeking safe-haven assets amid political uncertainties," Zumpfe noted.