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Gold prices soared to an all-time high on Thursday, February 20, as concerns over US President Donald Trump's tariff policies fueled fears of inflation and a potential global trade war.
Investors sought safety in bullion, driving spot gold up 0.5% to $2,945.83 per ounce as of 0621 GMT.
Earlier in the session, it reached a record peak of $2,947.11 per ounce.
So far this year, gold has gained 12%, repeatedly breaking records amid escalating geopolitical and economic uncertainties.
US gold futures also climbed 0.9% to $2,963.80 per ounce on Thursday.
Gold prices in India
In India, the domestic gold market reflected the global surge. According to GoodReturns data:
24-carat gold is priced at ₹8,804 per gram
22-carat gold is priced at ₹8,070 per gram
18-carat gold is priced at ₹6,603 per gram
Key factors driving gold prices
US tariff uncertainty:
Trump has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and aluminum. He recently announced that additional tariffs on lumber, cars, semiconductors, and pharmaceuticals would be introduced within a month, intensifying trade war fears.
Inflation and fed policy: Minutes from the latest Federal Reserve meeting revealed concerns about rising inflation due to Trump's trade policies. While the Fed remains cautious about rate cuts, the prospect of persistent inflation is keeping investors bullish on gold.
Strong central bank buying: Central banks continue to increase their gold reserves, while gold ETFs are shifting from net sellers to marginal buyers, further supporting prices.
Safe-haven demand: Gold remains a preferred hedge against geopolitical risks, with ongoing conflicts and economic instability driving demand.
Will gold hit $3,000 per ounce?
Market experts believe that the $3,000 per ounce mark is within reach if the current economic and geopolitical trends persist.
"Uncertain outlooks for both global trade and inflation are proving to be conducive for gold and are acting to bring the $3,000 level within range," said Tim Waterer, chief market analyst at KCM Trade.
"Gold has and should continue to benefit from robust physical market demand, underpinned by resilient central bank purchases and as physical gold ETFs transition from sellers to marginal buyers," added Trevor Yates, analyst at Global X.
Despite the bullish momentum, certain factors could slow down gold’s ascent:
If diplomatic progress is made in resolving the Russia-Ukraine conflict, safe-haven demand for gold could weaken.
Although rate cuts remain unlikely in the near term, any unexpected shift in Fed policy could impact gold's appeal as a non-yielding asset.
-With Reuters inputs
First Published:
Feb 20, 2025 12:57 PM
IST
