By Rahul Paswan and Anjana Anil
(Reuters) – Gold prices vaulted over the $3,200-per-ounce mark for the first time on Friday, as intensifying U.S.-China trade tensions rattled global markets and drove investors into the metal seen as a refuge from uncertainty.
Spot gold hit a record of $3,245.28 per ounce on Friday, having broken multiple records already so far this year.
Bullion has gained around 23% since January due to geopolitical uncertainties, central bank demand and increased flows into gold-backed exchange-traded funds.
“It took 14 years for gold to rise from $1,000/oz to $2,000/oz, but just over a year to surge from $2,000/oz to $3,000/oz,” said Nitesh Shah, commodities strategist at WisdomTree. “A further $800/oz increase to surpass $4,000/oz no longer seems far-fetched.”
U.S. president Donald Trump’s 90-day respite on reciprocal tariffs did not include China. Instead, he ratcheted up duties on Chinese imports to an effective 145% rate, prompting Beijing to lift its tariffs on U.S. goods to 125%.
Gold ETFs saw an inflow of 226.5 metric tons worth $21.1 billion in the first quarter, the largest amount since the first quarter of 2022, when markets were grappling with the consequences of Russia’s invasion of Ukraine. [GOL/ETF]
“A combination of heightened global economic tensions, the risk of stagflation – a combination of lower employment, growth and rising inflation – a weaker dollar, will, continue to support bullion,” said Ole Hansen, head of commodity strategy at Saxo Bank, in a note.
The recent surge in gold prices was also driven by a drop in the dollar, trading near a three-year low, making bullion a more attractive investment for other currency holders. [USD/]
Last year, gold recorded its best annual performance since 2010, partly due to market participants fleeing to the safe-haven asset due to increased geopolitical turmoil rising from the wars in the Middle East and Europe.
“The driving forces are the same as those that have been swirling around the markets since December – continued political tension, notably around the unpredictability over White House policy,” StoneX analyst Rhona O’Connell said.
Bullion logged its biggest quarterly rise since September 1986 in Q1 2025, and has already posted 23 all-time highs this year, among which 11 are above the $3,000 level.
Analysts say U.S. Federal Reserve rate cut expectations will keep supporting gold.
(Reporting by Rahul Paswan and Anjana Anil in Bengaluru; Editing by Pratima Desai and Alison Williams)
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