This is the first time ever.
Gold has reached new heights on Wall Street, surpassing $3,000 for the first time, driven by global uncertainty and rising demand for safe-haven assets. This year alone, gold prices have surged nearly 14%, with a weekly gain of about 3%. Over the past 12 months, gold has climbed 39%, mirroring a similar upward trend in silver, which has increased 35% over the last year and nearly 18% year-to-date.
The surge in gold prices stands in stark contrast to the broader financial markets, which have seen a dramatic $5 trillion loss in value in just three weeks, primarily due to concerns about tariffs and the uncertain economic outlook. Investors, seeking refuge from the volatility, have flocked to gold and other traditional safe-haven assets like U.S. Treasury securities. However, with stock markets showing signs of recovery, questions arise about whether gold’s upward trajectory will continue.
According to commodities strategist Ewa Manthey, tariff-related concerns driving inflation and slower economic growth are likely to keep gold prices elevated. If trade tensions escalate further, demand for gold as a safe haven is expected to remain strong. Meanwhile, a weaker U.S. dollar and declining Treasury yields have also supported gold’s rise. The U.S. Dollar Index has fallen more than 4% this year, making dollar-denominated commodities like gold cheaper for foreign investors.
In addition to trade concerns, there are signs that the Federal Reserve may soon resume interest rate cuts if inflation continues to ease. The market expects a quarter-point rate reduction in June. Despite this, the Fed has indicated that it is not in a rush to cut rates, and they will wait for more data before making further moves. Central banks worldwide have also contributed to the rising demand for gold, with significant purchases continuing into 2025, especially from countries like Uzbekistan, China, and Kazakhstan. This has reinforced gold’s appeal as a stable asset amid global economic and geopolitical shifts.
