Gold Prices Break $3,000 for First Time
Spot gold prices have topped $3,000 an ounce for the first time, as geopolitical turmoil continues to push the precious metal to new record highs.
Gold is seen as a safe haven for investors. President Trump’s tariff attacks have battered the outlook for US economic growth and sent US stocks into a sell-off, with the S&P 500 falling into correction territory overnight.
Spot gold prices rose 0.4 per cent to $3,000.87 an ounce in early morning trade on Friday, extending a rally that has added about 17 per cent to prices so far this year, hitting 13 all-time highs.
Analysts at RBC Capital Markets said: “Gold continues to face price uncertainty, particularly tariff uncertainty. While economic uncertainty is rising, mood and sentiment are deteriorating, and the probability of a recession has risen well above 30 per cent, we still see a pattern of gold prices being tied to tariffs.
They added that “general uncertainty and chaos” is “a very supportive factor for gold”. On Thursday, Trump threatened 200 percent tariffs on wine and champagne from EU countries in retaliation for his 50 percent levy on American whiskey, which was in retaliation for Trump’s 25 percent tariffs on steel and aluminum imports.
Han Tan, chief market analyst at Exinity Group, said: “The precious metal still has plenty of reasons to chase higher prices, including geopolitical and economic concerns, along with the prospect of a Fed rate cut.” Tan said the near-term trajectory for gold prices would depend on next week’s US Federal Reserve meeting, where it is widely expected to keep interest rates unchanged, and the signals given by its chairman, Jerome Powell. This week’s figures showed US consumer prices fell more than expected, which could create more room for a rate cut.
Analysts at ANZ said they expect gold to hit a record high of $3,050 an ounce this year.
Source: Bloomberg
