Gold climbed to an all-time high on Thursday as the US Federal Reserve signaled two possible interest rate cuts this year, adding to the precious metal’s appeal amid ongoing geopolitical and economic tensions.
Spot gold added 0.1% to $3,050.94 an ounce as of 0520 GMT, after touching an all-time high of $3,057.21 earlier in the session.
US gold futures gained 0.6% to $3,059.50.
Gold is driven by “a lot of uncertain market situations, geopolitical tensions, weaker US dollar and expectations that interest rates will be cut later,” said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd.
On Wednesday, the Fed left its benchmark rate unchanged in the 4.25%-4.50% range, as was widely expected.
Gold rises to new historic peak
Policymakers anticipate two quarter-percentage-point cuts by the end of 2025.
Non-yielding bullion thrives in a low interest rate environment.
US President Donald Trump’s initial policies, including extensive import tariffs, appear to have tilted the US economy towards slower growth and higher inflation, at least temporarily, Fed Chair Jerome Powell said.
Trump’s tariffs have flared trade tensions and are widely seen as inflationary and detrimental to economic growth.
The tariff uncertainty, rate cut possibilities and escalating tensions in the Middle East have contributed to the metal’s rally, prompting it to notch 16 record highs so far in 2025, with four being above the $3,000 milestone. Geopolitical and economic uncertainties underscore gold’s role as a store of value.
“For now, gold’s appeal as a safe haven and inflation hedge has further strengthened in light of those geopolitical concerns and tariff uncertainty. We remain constructive on the outlook of gold,” said OCBC FX strategist Christopher Wong.
“Given the very good performance in gold through Q1, I think a correction is not out of the question,” said Nicholas Frappell, global head of institutional markets at ABC Refinery.
“However, so far corrections have been relatively short-lived and well bid… $3,090-$3,100 may see some resistance.”
Spot silver firmed 0.15 to $33.84 an ounce and platinum rose 0.2% to $995.00. Palladium eased 0.2% to $956.35.