Gold prices catapult to record high
- By Reuters -
- Feb 20, 2025
Gold prices surged to a record high on Thursday, as fears of a global trade war sparked by US President Donald Trump’s tariff threats fueled safe-haven demand for the precious metal.
Spot gold was steady at $2,930.19 an ounce, as of 9:17 a.m. ET (1417 GMT) after hitting $2,954.69 earlier in the session, its tenth record high this year.
U.S. gold futures gained 0.4% to $2,946.90.
Gold, a safe-haven in times of uncertainty, has gained 12% so far this year.
“Ongoing trade tensions continue to stoke inflation and growth concerns and therefore safe-haven interest in gold,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Trump said on Wednesday he would announce tariffs related to lumber, cars, semiconductors and pharmaceuticals “over the next month or sooner”.
Since taking office on January 20, Trump has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and aluminium.
“We continue to see central bank buying … throughout the year. That’s one of the main underlying factors of support. We are also seeing ETF flows with three straight days of flows into the gold market,” said Phillip Streible, chief market strategist at Blue Line Futures.
Trump also denounced Ukrainian President Volodymyr Zelenskiy as a dictator on Wednesday and told him he had to move quickly to secure peace or risk losing his country.
A potential peace deal may briefly lower geopolitical tensions and could weigh on gold for short term, said Grant, adding, “the all-time high could hold for a number of weeks as there are sufficient fundamental factors that remain very supportive.”
Elsewhere, minutes of the Federal Reserve’s last policy meeting on Wednesday showed
Trump’s initial policy proposals had stoked concerns over rising inflation, reinforcing the central bank’s stance to hold off on further rate cuts.