Geopolitical Risks Send Gold To Record High, Touches $2,944
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Gold prices surged on Wednesday, February 19, 2025, reaching $2,944 per ounce, setting a new all-time high as global economic uncertainties and trade tensions fuelled safe-haven demand.
This latest rally was primarily driven by US President Donald Trump’s renewed tariff threats, which have reignited concerns over global trade relations.
The precious metal’s ascent comes in the wake of Trump’s announcement of plans to impose a 25% tariff on auto imports, along with new duties on semiconductors and pharmaceutical products.
These proposed measures have significantly escalated trade tensions, with the auto tariffs potentially taking effect as early as April 2, 2025, following cabinet reports on potential import levies.
Adding to the complex geopolitical landscape, the White House has hinted at the possibility of lifting sanctions on Russia amid ongoing diplomatic talks.
This development has raised alarms in Europe and Ukraine, further contributing to global economic uncertainty.
In the domestic US economic sphere, San Francisco Federal Reserve President Mary Daly emphasised the uneven nature of inflation’s progress, reinforcing the need to maintain a restrictive monetary policy stance.
Daly stated, “At this point, policy needs to remain restrictive until, from my vantage point, until I see that we are really continuing to make progress on inflation”.
This sentiment echoes earlier hawkish remarks from Fed officials, suggesting a cautious approach to any potential policy shifts.
The gold market’s strength is further evidenced by increased activity in global trading hubs.
Singapore, for instance, reported that its gold shipments to the United States reached a three-year high in January 2025, reflecting disruptions in bullion trading due to pricing disparities.
As gold continues to attract investors seeking safe-haven assets, market analysts are closely monitoring these developments and their potential impact on future price movements.
Sources: Trading Economics, MarketScreener
