Gold prices surged to new record highs on Friday, with spot gold jumping more than 1% to $3,207.20 an ounce as escalating US-China trade tensions drive investors toward safe-haven assets.
Trade War Fuels Record Rally
The precious metal has seen stellar gains this week as President Trump imposed 145% tariffs on Chinese goods, while China retaliated with 84% duties. This bitter exchange has triggered significant market volatility, with investors abandoning risk assets and US Treasuries in favor of traditional safe havens. Gold futures for June delivery soared 1.7% to $3,231.69/oz, extending the metal’s impressive 20% year-to-date gain.
Dollar Weakness Amplifies Gains
Softer-than-expected US inflation data has weakened the dollar and increased expectations for Federal Reserve rate cuts in 2025. This currency weakness, combined with the Fed’s dovish outlook against a backdrop of rising trade tensions, has created ideal conditions for gold’s ascent. The SPDR Gold Shares ETF (GLD) posted its largest single-day percentage increase since October 2023, jumping 2.8% to $282.82.
The market is pricing in three rate cuts in the U.S., with a 50% probability of a fourth. Source: Bloomberg L.P.
Central Bank Buying Supporting Prices
While inflation concerns and geopolitical uncertainty traditionally drive gold prices, analysts at BofA Securities note that central bank purchases have emerged as the primary catalyst in the current rally. This institutional buying, coupled with increased inflows into physical gold-backed ETFs, reflects growing concerns about US economic policies and potential challenges to the dollar’s reserve currency status.
Gold mining stocks have outperformed even the metal itself, with Agnico Eagle Mines up 35%, Newmont rising 29%, and Barrick Gold gaining 21% in 2025 as investors seek exposure to operational leverage amid the bullion price surge.
Gold (D1)
Gold is currently trading at an all-time high around $3,200. Bears may attempt to retest the previous high near $3,140, with a possible move toward the 30-day SMA. The RSI is on track to form a bearish divergence, showing a lower high while price makes a higher high. Meanwhile, the MACD remains tight following a recent bullish crossover.
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