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Gold prices rose in Asian trade on Thursday, holding close to record levels despite a broader risk-on sentiment in financial markets fueled by renewed hopes for a peace treaty between Russia and Ukraine.
The yellow metal’s strength was primarily driven by a weaker U.S. dollar, which declined even after January’s U.S. consumer price index (CPI) inflation came in hotter than expected. The inflation data further dampened expectations of near-term interest rate cuts by the Federal Reserve.
However, gold remained resilient, supported by ongoing trade tariff concerns under U.S. President Donald Trump, whose policies have contributed to gold’s rally in recent weeks.
As of 04:59 GMT, spot gold rose 0.5% to $2,918.70 an ounce, while gold futures climbed 0.6% to $2,947.00 an ounce. Spot prices remained within reach of the all-time high of $2,943.25 an ounce, recorded earlier this week.
Hopes for Russia-Ukraine Peace Talks Spark Market Optimism
Investor sentiment shifted after Trump announced that both Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy had expressed a desire for peace during separate phone calls. Following these discussions, Trump instructed senior U.S. officials to begin formal peace negotiations.
Further bolstering peace hopes, U.S. Defense Secretary Pete Hegseth stated that Ukraine would no longer pursue NATO membership or seek to reclaim all of its territories occupied by Russia. Ukraine’s NATO ambitions had been a major sticking point for Moscow and a key catalyst for the full-scale invasion launched in 2022.
The prospect of an end to the war, which is approaching its fourth anniversary, triggered a rally in broader financial markets as investors anticipated reduced geopolitical risks and a potential easing of global trade disruptions.
Gold Holds Firm Amid Rate and Trade Tariff Concerns
Despite improved risk sentiment, gold remained in demand as investors weighed persistent economic uncertainties.
Markets are still on edge over the outlook for U.S. interest rates after stronger-than-expected inflation data signaled that the Federal Reserve may delay rate cuts. Fed Chair Jerome Powell reaffirmed that the central bank would remain cautious in its approach, citing a strong U.S. economy as justification for patience in reducing rates.
Additionally, fears of escalating U.S. trade tariffs continued to support gold prices. Trump recently approved a 25% tariff on all steel and aluminum imports and hinted at imposing reciprocal tariffs on major U.S. trading partners. These measures raised concerns about inflationary pressures, further boosting gold’s appeal as a hedge against economic uncertainty.
Other Precious and Industrial Metals Performance
Other precious metals also gained on Thursday. Platinum futures climbed 1.2% to $1,057.65 an ounce, while silver futures edged up 0.3% to $32.88 an ounce.
Among industrial metals, benchmark copper futures on the London Metal Exchange dipped 0.1% to $9,474.75 per ton, while March copper futures gained 0.8% to $4.7265 per pound.
While optimism over peace talks fueled a risk-on rally in broader markets, gold’s ability to hold near record highs highlights continued investor demand for safe-haven assets amid lingering economic uncertainties.
