The Gold Price Continues to Soar: What’s Behind the Rise?
The gold price has reached yet another record, with a significant jump in value over the past week. After trading as low as US$3,006 per ounce on Monday, gold took off midway through the week, closing at US$3,085 on Friday. So, what’s driving the precious metal’s record-breaking streak?
Underlying Drivers
Many experts agree that gold is benefiting from long-term underlying drivers, such as central bank buying, as well as recent turmoil surrounding tariffs, the US economy, and global conflicts.
Tariffs in Focus
Tariffs have been a hot topic this week, with US President Donald Trump signing an executive order to impose 25 percent tariffs on all automobile imports starting on April 3. Trump’s reciprocal tariffs are also set to go into effect on that day. While it’s unclear how gold will be affected, one expert believes that gold, as a tier-one asset, is unlikely to face tariffs.
Copper on the Rise
Copper is another story entirely. Trump previously ordered the Department of Commerce to investigate copper tariffs, and while it was supposed to provide a report within 270 days, sources now indicate it could come sooner. This has bolstered prices for the red metal, with copper futures on the Comex in New York rising to an all-time high this week.
Fed Meeting and Economic Outlook
The US Federal Reserve meeting, which saw the central bank leave rates unchanged, is also playing a role in gold’s surge. While officials are still calling for only two cuts this year, some experts believe the Fed could cut as many as four to five times in 2025.
Gold’s Digestion of Economic Data
Friday brought the release of the latest US personal consumption expenditures (PCE) price index data, showing that core PCE was up 0.4 percent month-on-month in February, the largest gain since January 2024. On a yearly basis, core PCE was up 2.8 percent. Both numbers are higher than analysts’ estimates, and are expected to impact the Fed’s next rate decision.
Silver Squeeze 2.0?
Silver is also in the spotlight, with social media users planning a "silver squeeze 2.0" for this coming Monday. Similar to the 2021 silver squeeze, this movement aims to squeeze the market and drive up prices. The movement has already gained traction on X, formerly Twitter, with the white metal’s price on the move.
Conclusion
In conclusion, the gold price’s record-breaking streak can be attributed to a combination of long-term underlying drivers, recent turmoil surrounding tariffs and the US economy, and the Fed’s decision to leave rates unchanged. As the market continues to digest economic data and uncertainty surrounding tariffs, it’s unclear what the future holds for gold. One thing is certain, however: the precious metal is unlikely to face tariffs, and its value is likely to continue to soar.
