Gold scales record high, sprints towards USD 3,000 milestone

Gold prices raced to a record high within touching distance of the key milestone of USD 3,000 per ounce on Thursday, with momentum driven by elevated tariff uncertainty and bets on monetary policy easing by the US Federal Reserve.

Spot gold climbed 1.6% to USD 2,979.76 an ounce, as of 13:55 ET (1755 GMT), after hitting its twelfth record peak this year earlier in the session.

Prices are up nearly 14% so far this year after a solid 27% gain in 2024.

US gold futures settled 1.5% higher at USD 2,991.3.

“Gold is in a secular bull market. We forecast prices to trade between USD 3,000-USD 3,200 this year,” said Alex Ebkarian, chief operating officer at Allegiance Gold.

US President Donald Trump’s fluctuating trade policies have helped gold, an asset preferred by investors amid geopolitical and economic turmoil. US Commerce Secretary Howard Lutnick said a recession would be “worth it” to get Trump’s economic policies in place.

Next on the radar is the Federal Reserve’s monetary policy meeting next Wednesday. The central bank is expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range.

“The potential impact of the tariff and trade threats are impossible to model, forcing the Fed to gauge economic data to help it determine its next move,” said John Ciampaglia, CEO of Sprott Asset Management.

“We believe the Fed is stuck in a wait-and-see state.”

The central bank has reduced rates by 100 basis points since September, but paused its easing cycle in January. Traders expect policymakers will resume cutting borrowing costs in June.

Data from the US Labor Department showed producer prices were unexpectedly unchanged in February, while the consumer price index rose 0.2% last month after accelerating 0.5% in January.

“Strong ETF (exchange-traded fund) demand and continued central bank buying in a backdrop of geopolitical uncertainty and the continued uncertainty created by tariff changes has really continued to stoke appetite for gold,” said Standard Chartered analyst Suki Cooper.

SPDR Gold Trust GLD, the world’s largest gold-backed ETF said its holdings rose to 907.82 metric tons on February 25, the highest since August 2023.

Meanwhile, China continued its gold purchases for a fourth consecutive month in February, the People’s Bank of China data showed.

Spot silver rose 1.4% to USD 33.69 per ounce.

“A strong breakout above USD 33.30 could open the doors toward USD 34 for silver,” said Lukman Otunuga, senior research analyst at FXTM.

Platinum gained 0.6% to USD 990.25, while palladium added 0.9% to USD 956.99.

(Reporting by Ashitha Shivaprasad, Sarah Qureshi, Brijesh Patel, and Anmol Choubey in Bengaluru; Editing by Leroy Leo and Nia Williams)