Gold prices jumped over the psychological level of $ 3,000 per ounce for the first time in history, driven by geopolitical and economic uncertainty that encouraged investors to turn to safe assets. Gold recorded 13th highest record for 2025, increasing 14% so far after a 27% spike in 2024. The key factors that support the increase include large-scale purchases by central banks and uncertainty as a result of global trade protection policy.
Trade tensions driven by US tariffs against China and Canada have also strengthened the demand for gold as a hedge. Deplicated stock markets and difficult political risks have attracted western investors to the gold market. In fact, the gold stock at the comex warehouse set a record of 40.56 million ounces, showing a surge in demand despite the slow flow.
In addition, the expectation of a decline in interest rates by the Federal Reserve (Fed) also put pressure on the US dollar, making gold more attractive to global investors. The market is now predicting at least three cuts this year, increasing from the two expected. The Fed has dropped the rate of 100 base points since September 2024 and is expected to continue the Monetary Release by June.
Demand for the Gold Exchange Trade Fund (ETF) has also jumped, with the largest weekly inflow since March 2022. SPDR Gold Trust, the world's largest gold ETF, has recorded an increase in 907.82 tonnes of metrics, the highest level since August 2023. In addition, central banks around the world have continued to increase their gold reserves as a protection against economic uncertainty and US dollar weakness.
With these factors, some analysts predict that gold prices can reach $ 3,500 if the US budget deficit continues to worsen. Goldman Sachs has raised their gold price target to $ 3,100 by the end of 2025, while the Chinese central bank continues the purchase of gold after a six -month pause by 2024. The trend shows gold remains a preferred asset in the face of global uncertainty.
