Gold surged to a record high of over $3,200 per ounce on Friday, solidifying its status as the top safe-haven asset while bonds and the dollar weakened. The rally in gold futures marked their best performance in five days since 2020, amidst a tumultuous week on Wall Street exacerbated by escalating trade tensions between China and the US. China’s announcement of increasing duties on US imports to 125% in response to a similar move by the Trump administration further fueled uncertainty in the markets.
Ryan McIntyre, senior managing partner at Sprott, noted that the soaring gold prices indicated a shift in investors’ sentiment towards US assets, reflecting a loss of confidence in the market. This sentiment was also evident in the bond market, typically considered a safe haven, where Treasury yields spiked to their highest level since February. David Morrison, senior market analyst at Trade Nation, highlighted the rush into gold as investors sought refuge from market volatility, leading to a surge in gold prices despite the usual consolidation period.
The US dollar index also faced downward pressure, reaching its lowest level since 2022 amidst the market turmoil. Gold futures have climbed over 24% year-to-date as trade uncertainties and recession fears bolstered demand for the precious metal. Michael Brown, senior research strategist at Pepperstone, emphasized the erratic policy decisions contributing to gold’s appeal as a safe-haven asset.
Gold’s rally was further supported by record-high central bank demand and increased inflows into gold-backed exchange-traded funds. In a volatile market environment, gold has emerged as a preferred asset for investors seeking stability amid economic uncertainties.
