Gold Surges to Record High Amid U.S. Economic Concerns

Gold Prices Surge Amid Economic Uncertainty

Gold prices have surged to unprecedented levels as apprehensions regarding American economic growth intensify, driven in part by recent U.S. administration policies and weak inflation reports. Investors are increasingly turning to gold as a safe asset amidst this uncertainty.

In early trading in Asia on Friday, the price of gold reached $2,989.98 per ounce, surpassing the prior peak recorded just the day before.

This latest increase follows the release of U.S. inflation data, which indicated a downturn in wholesale market inflation for February, attributed to a significant decline in trade margins. These findings have bolstered expectations for a shift toward more lenient monetary policies, as U.S. officials aim to alleviate persistent inflationary pressures. Lower borrowing costs typically support gold prices, as the asset does not yield any interest income.

In addition, yields on 10- and 30-year U.S. Treasury bonds climbed to their highest levels this month. This movement has attracted investors to U.S. government bonds, as expectations for domestic economic growth decline, adversely impacting stock performance.

Further support for gold came from low bond yields and heightened demand for safe-haven assets. Notably, the S&P 500 index experienced a dramatic 10% drop on Thursday—the first such decline in almost two years—resulting in market losses close to $5 trillion since the peak observed in February.

Investor sentiment worsened after the U.S. President threatened to impose a 200% tariff on European wines, champagne, and other alcoholic beverages. He reaffirmed his commitment to maintaining tariffs on steel and aluminum implemented earlier this week and indicated plans to introduce further punitive tariffs on global trading partners by April 2.

Market confidence is growing that the unpredictability of the current administration’s trade policies, along with various economic concerns, will result in continued gains for gold.

Analysts at Macquarie Group have projected that gold could reach $3,500 per ounce in the second quarter, while BNP Paribas has revised its average price expectations to exceed $3,000.

As of 6:44 AM in Singapore, the spot price of gold was recorded at $2,986.22 per ounce, indicating a weekly gain of 2.7%.

Conversely, the Bloomberg index of the U.S. dollar remained stable. Meanwhile, silver prices stabilized after a rise of over 5% during the preceding three sessions, and there were no notable fluctuations in platinum prices.