Gold prices surged to a fresh all-time high Monday, taking bullion’s year-to-date gain past 10%, as global investors looked for safe-haven assets while bypassing Treasury bond purchases amid growing tariff and trade uncertainties tied to President Donald Trump.Â
Gold prices are now on pace to top the $3,000 mark for the first time on record after hitting an all-time peak of $2,907 per ounce in overnight trading.
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The market move followed another weekend of tariff threats from President Trump, this time tied to steel and aluminum imports and comments that could raise concern about the fate of some U.S. Treasury securities.Â
Trump also said he would impose a 25% levy on all steel and aluminum products imported into the U.S., to apply as early as this week, while making vague comments about Elon Musk’s government efficiency team having found “irregularities” in U.S. Treasurys.Â
Trump added that the U.S. “may have less debt than we thought of” following Musk’s foray into the Treasury Department, which suggested the potential for targeted defaults on some paper outstanding.
“Demand for the safe-haven precious metal is increasing as anxiety grows over the potential impact of the new US administration’s protectionist drive on global economic growth prospects and its inflationary effect on US domestic prices,” said Ricardo Evangelista, senior analyst at ActivTrades.
“Against this backdrop, gold risk remains tilted to the upside, with further price gains possible in the near term,” he added.
Gold was last marked 1.7% higher from Friday’s closing peg, trading at $2,905.25 per ounce, taking its year-to-date gain to around 10.7% and its one-year advance past 43.5%.
The SPDR Gold Shares ETFÂ (GLD) , the world’s largest exchange-traded fund tied to gold prices, was last marked 1.6% higher in premarket trading at $267.15. Such a move would extend its 2024 gain to around 9%.
Gold beating the greenback
Gold has notably outpaced gains for the greenback since Trump was elected in November, rising more than 15% against a 4.65% gain for the U.S. dollar index, thanks in part to concerns tied to his trade and tariff policies.
Those policies, according to economists, have the potential to stoke domestic inflation and drag on global economic growth.
“With Trump back in the White House, uncertainty and unpredictability are running high,” said ING’s commodities strategist, Ewa Manthey. “And gold will continue to benefit from this environment.”
Related: Why physical gold is your best bet against market chaos
Central bank purchases have also underpinned gold’s longer-term gains. Governments worldwide are looking to wean their reliance on U.S. dollars in their foreign-currency reserves and to develop trade and supply chains independent of the world’s biggest economy.
Global central banks have bought more than 1,000 metric tons of gold for each of the past three years, according to World Gold Council data. They’d added around 333 million metric tons over the three months ended in December as part of their broader defensive effort.Â
In the last 7 years, the USD as a share of global reserve dropped from 61% to 59%.
It's clearly over for the Dollar.
(Jokes aside: the red area expanding is mostly Gold, and that's very interesting!) pic.twitter.com/0ppFrVq4CF
— Alf (@MacroAlf) February 10, 2025
“Central banks’ healthy appetite for gold is also driven by concerns from countries about Russian-style sanctions on their foreign assets in the wake of decisions made by the US and Europe to freeze Russian assets, as well as shifting strategies on currency reserves,” said ING’s Manthey. “Looking ahead, we expect central banks to remain buyers.”
Those purchases are also set against the ongoing angst in the government-bond market tied to the staggering levels of U.S. debt, which is on pace to top $40 trillion this year, and the risk of either a targeted or technical default tied to the current debt ceiling standoff in Washington.
Fed rates key to extend gold gains
Foreign investors may be willing to fund America’s current-account deficits as the country piles up the world’s largest tally of government bond obligations. But they aren’t likely to do so if their economic growth engines — in the form of U.S. exports — are blunted by tariffs and trade barriers.
However, Manthey at ING argues that the pace of Federal Reserve interest rate cuts will likely prove a more important indicator for gold prices heading into the second half of 2025.
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“If the Fed is forced to maintain higher rates for longer, this could undermine gold’s appeal,” she noted, saying tariff and inflation uncertainty is likely to push the first rate cut of the year to at least June and possibly beyond.
“However, the central bank will still ease its policy over the course of the year, even if its path to easing is slower than previously expected,” she said.
“We believe gold will hit more record highs this year, with $3,000 per ounce now in sight,” she added. “The macro backdrop will remain favorable for gold as interest rates decline and foreign-reserve diversification continues amid geopolitical tensions.”
Related: Veteran fund manager issues dire S&P 500 warning for 2025
