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, equivalent to a 1.35% increase, settling at a record high of $2,796.3/oz, according to data from the Kitco exchange. During the session, spot gold prices touched an all-time intraday high of $2,803.4/oz.
Just before 8 a.m. Vietnam time on Friday, spot gold prices in the Asian market were up $1.2/oz from the U.S. close, trading at $2,797.5/oz. Converted at Vietcombank’s selling exchange rate, this is equivalent to about VND 85.3 million/troy ounce.
On the futures market, gold prices climbed 1.8%, ending Thursday’s session at an unprecedented high of $2,845.2/oz.
These new records surpass the previous peaks reached in late October last year. The primary driver of gold prices at present is the risk hedging demand of investors, given the numerous uncertainties surrounding Trump’s policies.
“There is uncertainty and anxiety in the market about the new Trump administration’s policies, both in terms of trade and foreign affairs… Along with this, new technical buying has emerged as gold and silver prices have risen together,” said 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 reiterated his intention to impose a 25% tariff on goods from Canada and Mexico on the first day of February.
On Thursday, the U.S. dollar index and U.S. Treasury bond yields fell, providing additional support for gold’s rally.
The Dollar Index, which measures the greenback’s strength 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%, the lowest level in more than a month.
“Gold is acting as a safe haven as investors seek shelter from the storm of unpredictability,” said Susannah Streeter, senior analyst at Hargreaves Landsdown, in a statement to Reuters.
Gold’s upward momentum was maintained even as the Federal Reserve (Fed) signaled a more hawkish stance than expected at the conclusion of its two-day policy meeting on Wednesday. Along with pausing its rate-cutting cycle after three consecutive reductions, the Fed suggested it would not be in a hurry to lower interest rates in 2025, as inflation remains “relatively high.”
A report released on Thursday by the U.S. Department of Commerce showed that the country’s gross domestic product (GDP) growth slowed in the fourth quarter of 2024, but the pace of expansion was still strong enough to suggest that the Fed will slow the pace of rate cuts this year. The world’s largest economy grew at an annual rate of 2.3% in the quarter, below the 2.6% forecast by analysts in a Reuters poll and down from the third quarter’s 3.1% pace.
On Friday, the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation measure, will be in the spotlight for precious metals investors. A hotter-than-expected PCE report could increase the likelihood of the Fed keeping interest rates higher for longer, putting downward pressure on gold prices, and vice versa.
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