The price of gold has soared to another record peak, fuelled by concern over President Donald Trump's tariff strategy and a weakening dollar, leading investors towards the traditional sanctuary of precious metals.
Gold's value ascended 1.5% to surpass $3,200 (£2,451) per troy ounce on Friday – an unprecedented level – as Asian markets stumbled due to the ongoing repercussions of President Trump's deferred tariff measures, as reported by .
Despite its status as a refuge for capital during turbulent times, the precious metal had initially been swept up in a severe sell-off amid tariff-driven market chaos.
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Gold spot prices experienced a remarkable increase of over 30% since the beginning of 2024 but witnessed a downturn from $3,166/oz to $2,973/oz from April 2 to April 6. Market experts believe that investors were compelled to sell their gold assets to cover margin calls from creditors.
Pepperstone analyst Michael Brown pointed to the removal of the "risk premium" associated with gold after its exclusion from the postponed tariffs Trump labeled ‘Liberation Day’ as the cause of the brief dip.
Nevertheless, from April 6 onward, gold has bounced back robustly, registering its most significant bi-day surge since 2020 and reaching a new all-time high.
Market strategists have attributed this latest rally to the faltering US dollar – which renders the metal more accessible to buyers using other currencies – and predictions that central banks might accelerate interest rate cuts more than previously presumed to prevent an economic deceleration.
This week has seen the dollar descend to its lowest level against major global currencies in a decade.
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Dominic Schinder of UBS Global Wealth informed Bloomberg TV that further rate cuts from the Federal Reserve would provide another "leg up" for gold, as the yield on holding cash – a common refuge amid prevalent bearish sentiment – is lower.
This rally boosted London-listed gold miners, leading the FTSE 100 higher on Friday morning. Fresnillo saw an increase of approximately 5.9 per cent, while Endeavour experienced a surge of over 4.5 per cent in early trades.
Brokers at Peel Hunt upgraded precious-metal-miner Fresnillo from 'hold' to 'add' in a note, suggesting that sustained high gold and silver prices would generate more cash flow at the commodities giant.
"[The first quarter] saw gold and silver prices well ahead of expectations on rising market uncertainty," they noted. "The extreme US tariff announcements simply added to this uncertainty.
"In our view this will lead to sustained high gold prices, only fading slowly to our unchanged long-run assumption of US$2,000/oz."