Gold extended its historic rally on Friday, breaking through fresh all-time highs as investors responded to deepening trade tensions and growing expectations of rate cuts from the Federal Reserve. With momentum supported by both geopolitical catalysts and structural demand, bullion continues to attract buyers ahead of key U.S. inflation data.
Safe-Haven Demand Drives Price to New Heights
Gold’s record-breaking run showed no signs of slowing on Friday, as the precious metal punched through yet another all-time high. Investors, jittery over worsening trade tensions and a stubborn inflation backdrop, piled into the classic safe haven. Growing bets on interest rate cuts only added fuel to the fire.
The rally gathered pace in early Friday trade, with spot prices hitting a new peak of $3,086.21 during the Asian session. Gold held firm heading into the U.S. open, last up 0.9% at $3,083.33. Futures followed suit, briefly touching $3,124.40 before easing to $3,081. The session still has room to run, but for now, momentum remains firmly with the bulls.
The latest surge was triggered by a fresh round of geopolitical fireworks. U.S. President Donald Trump announced new 25% tariffs on imported vehicles, set to take effect from 2 April. The move drew swift backlash from key allies including Canada and France, and revived fears of a broader global trade war. Trump’s auto tariff announcement sent equity markets sharply lower, with automakers leading the decline as investors scrambled to reassess the fallout.
Analysts See Further Upside for Gold
“Gold has everything going for it right now,” said Kyle Rodda, financial markets analyst at Capital.com. “U.S. trade policy, fiscal stimulus, geopolitical tension, slowing global growth. It’s all blowing in gold’s direction.” With the $3,100 barrier now behind us, Rodda noted that the rally is likely to continue, with gold potentially reaching even higher levels if current trends persist (Marketscreener).
But this isn’t just a headline-driven spike. Beneath the surface, structural demand remains strong. Central banks (particularly those in emerging Asia) have continued to accumulate gold, reinforcing its role as a strategic reserve asset. At the same time, institutional interest in bullion-backed ETFs is quietly returning, lending further depth to the rally.
“The market remains supported by strong haven demand amid tariff concerns, sustained central bank buying (particularly in Asia), and renewed interest in bullion-backed ETFs from institutional investors,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Forecasts are shifting upward as the rally gathers steam. Goldman Sachs has raised its year-end target to $3,300 an ounce, with the potential for further upside if hedging flows return to pandemic-era levels (Reuters). Meanwhile, Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany, sees gold testing the $3,200 to $3,250 range in the near term, provided geopolitical risks persist and the Federal Reserve avoids a sharp policy reversal.
Spotlight on Inflation Data and Fed Policy
Recent data from February 2025 indicates that the PCE Price Index, the Federal Reserve’s preferred inflation gauge, rose by 2.5% year-over-year, unchanged from January’s rate. On a monthly basis, the index increased by 0.3%, aligning with market expectations. However, the core PCE Price Index, which excludes volatile food and energy prices, saw a year-over-year increase of 2.8%, slightly above forecasts of 2.7%. This core measure also rose 0.4% month-over-month, exceeding the anticipated 0.3% increase (Forbes).
These figures, released on March 28, suggest persistent inflationary pressures, potentially influencing the Federal Reserve’s upcoming monetary policy decisions.
Richmond Fed President Tom Barkin described current policy as “moderately restrictive,” pointing to ongoing uncertainty and shifting fiscal dynamics. Even so, markets appear to be leaning toward a more dovish outlook (Richmond Fed).
Gold, which yields nothing, tends to outperform when interest rates fall or broader uncertainty takes hold. With trade tensions building and policy likely to loosen, bullion looks well positioned to extend its record-breaking run.
