Gold Approaches Record Levels Amid Trump’s Plans and Inflation Concerns
Gold prices remained stable near their all-time highs during Monday trading, amid growing concerns over the trade policies that former U.S. President Donald Trump intends to implement. This comes as markets await a key inflation report from the United States, which could play a crucial role in shaping the Federal Reserve’s monetary policy in the coming period.
Gold Price Movements
Spot gold remained steady at $2,934.82 per ounce as of 00:20 GMT, while U.S. gold futures fell by 0.1% to $2,950.10. Prices had reached an all-time high of $2,954.69 last Thursday.
Economic and Political Influences on Gold Prices
Last week, Trump announced plans to impose new tariffs next month, adding lumber to the list of goods already targeted, including automobiles, semiconductors, and pharmaceuticals. Investors are closely monitoring the potential economic impact of these policies, as they are seen as inflationary factors that could push the Federal Reserve to keep interest rates elevated, potentially affecting gold’s attractiveness as a safe-haven investment.
In this context, all eyes are on the Personal Consumption Expenditures (PCE) Index—the Fed’s preferred measure of inflation—set to be released on Friday.
Gold Price Forecasts for 2025
Major financial institutions have raised their gold price forecasts for the year. Goldman Sachs and Morgan Stanley now predict that gold could reach $3,100 per ounce before the end of the year, while UBS expects it to hit $3,200 per ounce. Meanwhile, JPMorgan estimates that gold could reach $3,000 in the coming months.
Key Drivers of Gold’s Surge
Gold prices surged 27% over the past year, reaching a record $2,800 per ounce, supported by three main factors:
- Central Bank Purchases: Central banks, particularly in China, have significantly increased their gold reserves.
- Easing Monetary Policies: The Federal Reserve’s lower interest rates have made gold a more attractive asset compared to other investments.
- Rising Demand Amid Geopolitical Tensions: Gold remains a preferred safe-haven asset during times of economic and political uncertainty.
With economic and geopolitical factors continuing to support gold, the precious metal appears to be on track for new price milestones this year. As inflation fears persist, markets are closely watching the Federal Reserve’s next moves, which will determine whether gold continues its upward trajectory toward the $3,000 per ounce mark.
