Gold steadied after a record-breaking rally with continued economic and geopolitical uncertainty sustaining demand for the safe-haven asset.
Bullion traded near $2,860 an ounce after adding 0.9% on Wednesday on heightened global tensions and investor concerns over inflationary risks.
The precious metal’s momentum remains underpinned by global political developments. Markets are closely watching US foreign policy moves after President Donald Trump suggested that the US could take over Gaza, a statement later tempered by his aides, while also expressing his intent to pursue a new nuclear deal with Iran. In addition, Washington is set to present a plan next week to end Russia’s war on Ukraine, adding another layer of uncertainty to the market.
Gold has also found support from trade-war fears, with concerns that Trump may impose additional tariffs on other nations.
The World Gold Council noted that the appetite for bullion among central banks remains strong and has rallied 9% this year amid sustained investor interest.
Markets are assessing whether US monetary policy will shift as a result of potential tariff-induced inflation.
A report on Wednesday indicated weaker-than-expected demand for services and suggested that economic activity could slow in the coming months as Americans tighten spending.
“Gold’s Appeal to Central Banks Seen Underpinning Demand in 2025,” analysts noted, pointing to continued institutional interest in precious metals as a hedge against inflation and currency fluctuations.
Trade-related uncertainty has also driven increased demand for gold reserves with reports that major dealers are moving bullion to the US ahead of potential tariff changes.
In London, gold stored in the Bank of England vaults has been trading at a discount as fears of Trump’s tariff policies lead to weeks-long queues to withdraw metal.
Spot gold edged 0.2% lower to $2,860.37 an ounce as of 7:06 a.m. in London, after reaching a historic high of $2,882.36 on Wednesday. The Bloomberg Dollar Spot Index gained 0.1%, reversing its 0.9% decline over the previous two sessions. Silver also edged lower, while platinum and palladium remained little changed.
With central banks accumulating gold reserves, geopolitical risks escalating, and inflation concerns rising, analysts expect bullion’s safe-haven appeal to remain strong in the months ahead. Investors continue to monitor global developments, particularly US policy shifts, for further indications on gold’s trajectory.
