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Gold prices remained on track for a third straight weekly gain on Friday, supported by expectations of U.S. Federal Reserve rate cuts and safe-haven demand amid escalating geopolitical and economic uncertainties. The precious metal continued to draw investor interest, reaching a new all-time high of $3,057.21 per ounce on Thursday before pulling back slightly.
Gold Hits Record High, Maintains Weekly Gains
As of 0700 GMT, spot gold dipped 0.5% to $3,028.77 an ounce, weighed down by a stronger U.S. dollar. Meanwhile, U.S. gold futures eased 0.3% to $3,035.70. Despite the decline, gold remained 1.5% higher for the week, underscoring continued investor appetite for the metal.
A whirlwind of factors, including monetary policy shifts, trade tensions, and geopolitical instability, has fueled gold’s surge in 2025. So far this year, gold has posted 16 record highs, with four instances of breaking above the crucial $3,000 level.
Federal Reserve Signals Rate Cuts, Supporting Bullion Prices
Gold’s recent rally has been underpinned by shifting Federal Reserve policy expectations. On Wednesday, the Fed held its benchmark interest rate steady at 4.25%-4.50%, as widely expected. However, policymakers indicated two quarter-percentage-point cuts by the end of the year, reinforcing a dovish outlook that tends to favor non-yielding assets like gold.
Adding to concerns, Fed Chair Jerome Powell acknowledged that President Donald Trump’s initial economic policies, particularly import tariffs, have tilted the U.S. economy toward slower growth and temporarily higher inflation. This combination of growth uncertainty and inflationary risks has further strengthened gold’s appeal as a hedge against economic instability.
Geopolitical Tensions Add to Gold’s Safe-Haven Demand
Beyond monetary policy, geopolitical turmoil has amplified safe-haven inflows into gold. The ongoing conflict in the Middle East remains a key driver, with Israel resuming airstrikes and ground operations in Gaza on Thursday, ending a two-month ceasefire. The intensification of the conflict led to the deaths of 91 Palestinians, adding to global concerns over escalating instability in the region.
Such geopolitical uncertainties often drive demand for gold, as investors seek to hedge against market volatility and geopolitical risks.
Precious Metals Market Overview
While gold has sustained gains, other precious metals faced weekly losses:
- Silver (XAG/USD) declined 1.4% to $33.08 an ounce.
- Platinum (XPT/USD) fell 0.3% to $982.20 an ounce.
- Palladium (XPD/USD) shed 0.6% to $946.75 an ounce.
Despite these declines, gold’s resilient rally underscores its role as a preferred store of value amid rising macroeconomic and geopolitical risks.
Outlook: Gold’s Trajectory Hinges on Fed Policy and Global Risks
As investors brace for further economic and geopolitical developments, gold’s trajectory will likely be influenced by:
- Upcoming economic data releases, particularly inflation and employment figures, which could shape Fed policy expectations.
- Geopolitical tensions, with any further escalation in global conflicts potentially reinforcing safe-haven demand.
- The strength of the U.S. dollar, which remains a key counterforce to gold’s upward momentum.
For now, gold continues to shine, driven by a mix of monetary policy shifts, trade uncertainty, and geopolitical risks—a powerful combination that has propelled the metal to historic highs in 2025.
