Gold surges above $3,200 amid dollar slump and trade tensions
Gold reached a record level above $3,200 per ounce on Friday. The price of this precious metal is driven by a weakening dollar and growing concerns about the escalating trade war. Gold, the most expensive of metals, gained over 5% during the week. What might happen next?
According to data from 8:01 AM Greenwich Mean Time (GMT), the spot gold price rose by more than 1%, reaching $3,215 per ounce, following a previous record high of $3,220. The data indicates that precious metals continue their impressive streak, noting an increase of nearly 21% since the beginning of 2025. US gold futures rose by almost 2%, reaching $3,234.
Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany, explains the reasons behind this trend.
Recession risks are mounting, bond yields are soaring, and the U.S. dollar continues to weaken – all factors reinforcing gold's role as a crisis hedge and inflation shield, he explains in a conversation with the Reuters agency.
The dollar index fell to its lowest level in a decade, making gold priced in dollars cheaper for foreign buyers.
The trade war could drive up gold prices
A break in the trade war did not allay fears over the effects of Donald Trump's policy. Stock markets worldwide are still experiencing declines, and economic uncertainty has increased, further boosting the attractiveness of gold as a haven for investors.
Giovanni Staunovo, an analyst at UBS, predicts a further increase in gold prices.
According to his assessment, gold still holds room for growth, with an optimistic forecast aiming for a range of $3,400 to $3,500 per ounce in the months ahead.
The increased demand from central banks and increased flows into gold-backed ETFs also support this trend.
The outlook for monetary policy and precious metal prices
There are other reasons why precious metals have become more expensive. Data published on Thursday showed that inflation in the US unexpectedly fell in March. The market's attention now focuses on producer price data, which will be published at 1:30 PM GMT, as these may provide clues about the future path of the Federal Reserve’s monetary policy.
Experts predict that the Fed will resume interest rate cuts in June and will likely reduce them by a full percentage point by the end of 2025. The prospect of monetary policy easing further supports the prices of precious metals.
Other precious metals also saw increases. The spot price of silver rose by 0.4% to £25 per ounce, platinum gained 0.7%, reaching £760, while palladium increased by 1.9% to £745. All these metals benefit from the overall upward trend in the commodities market.
