Global gold prices surged to a new record high during Thursday’s trading session (January 30th), as investors sought safe havens amid renewed tariff threats from U.S. President Donald Trump. However, a crucial U.S. inflation report on Friday could shape the path of interest rates and, subsequently, gold prices.
At the close of trading in New York, spot gold rose by $37.5/oz compared to the previous session’s close, marking a 1.35% increase, and settling at a record high of $2,796.3/oz, according to Kitco exchange data. During the session, spot gold prices touched an all-time intraday high of $2,803.4/oz.
As of early Friday morning Vietnam time, spot gold prices in the Asian market had climbed by $1.2/oz from the U.S. session close, trading at $2,797.5/oz. When converted using Vietcombank’s selling exchange rate, this price equates to approximately 85.3 million VND per tael.
On the futures market, gold prices rose by 1.8%, ending Thursday’s session at an unprecedented high of $2,845.2/oz.
These new records surpass the previous peak reached in late October last year. The primary driver of gold prices at present is the risk aversion sentiment among investors, given the numerous uncertainties surrounding Trump’s policies.
“There is uncertainty and concern in the market about the new Trump administration’s policies, both in terms of trade and foreign affairs… At the same time, new technical buying has emerged as gold and silver prices have risen together,” remarked senior analyst Jim Wyckoff of Kitco Metals.
This week, the White House announced that Trump would impose tariffs on imports from Mexico and Canada starting Saturday (February 1st). In a statement on Thursday, Trump affirmed his intention to impose a 25% tariff on goods from Canada and Mexico, effective the first day of February.
During Thursday’s session, a weaker U.S. dollar and lower U.S. Treasury bond yields further bolstered gold’s rally. The Dollar Index, measuring the greenback against a basket of six major currencies, closed at 107.8, down from the previous session’s 107.94.
The yield on the 10-year U.S. Treasury bond fell to 4.51%, its lowest level in over a month. “Gold is acting as a safe haven as investors seek shelter from the storm of unpredictability,” remarked Susannah Streeter, senior analyst at Hargreaves Landsdown, to Reuters.
Gold’s upward momentum persisted even as the Federal Reserve signaled a more hawkish monetary policy stance than expected at the conclusion of its periodic meeting on Wednesday. Along with pausing its rate-cutting cycle after three consecutive reductions, the Fed hinted that it would not rush to lower interest rates in 2025, citing relatively high inflation.
A report released on Thursday by the U.S. Commerce Department showed that the country’s gross domestic product (GDP) growth slowed in the fourth quarter of 2024 but remained strong enough to suggest that the Fed will likely slow the pace of rate cuts this year. The world’s largest economy expanded by 2.3% in the quarter, below the 2.6% increase projected in a Reuters survey of analysts, and down from the third quarter’s 3.1% growth.
On Friday, the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation measure, will be closely watched by investors in the precious metals market. A hotter-than-expected PCE report could increase the likelihood of the Fed keeping interest rates higher for longer, exerting downward pressure on gold prices, and vice versa.
