Spot gold rose 0.9 per cent to $5,060.36 per ounce by 0507 GMT, after touching an all-time high of $5,110.50 in the previous session. The precious metal’s rally marked the first time prices had decisively broken above the $5,100 level, underscoring the strength of demand amid global uncertainty. Meanwhile, U.S. gold futures for February delivery eased slightly, slipping 0.5 per cent to $5,056.90 per ounce.
Market analysts attributed the surge largely to geopolitical tensions and fears around U.S. trade policy. According to Tim Waterer, Chief Market Analyst at KCM Trade, President Donald Trump’s increasingly disruptive policy stance has reinforced gold’s appeal as a defensive asset. He noted that renewed threats of higher tariffs on key trading partners such as Canada and South Korea have been sufficient to sustain investor appetite for safe havens.
Trade tensions escalated on Monday after Trump announced plans to raise tariffs on South Korean imports of automobiles, lumber and pharmaceuticals to 25 per cent, accusing Seoul of failing to finalise a trade agreement with Washington. The move followed earlier threats of tariffs against Canada, despite signs of improving diplomatic relations after Canadian Prime Minister Mark Carney’s recent visit to China.
The rally in gold has also been supported by weakness in the U.S. dollar. Waterer said intervention by U.S. and Japanese officials to stabilise the yen had weighed on the greenback, making dollar-denominated gold cheaper for overseas buyers. Additional pressure on the dollar stemmed from concerns over a possible U.S. government shutdown and lingering uncertainty around Trump’s policymaking approach.
Investor focus has also turned to the U.S. Federal Reserve, which is widely expected to hold interest rates steady at its meeting beginning later in the day. Markets remain unsettled by reports of a criminal investigation involving Federal Reserve Chair Jerome Powell, efforts to remove Fed Governor Lisa Cook, and the anticipated nomination of Powell’s successor in May, all of which have added to volatility in financial markets.
Beyond macroeconomic factors, record gold prices are reshaping the mining sector. China’s Zijin Gold is set to acquire Canada’s Allied Gold for about C$5.5 billion ($4.02 billion) in cash, a deal driven by soaring bullion prices that have boosted miners’ margins and cash flows, fuelling consolidation across the industry.
Silver mirrored gold’s strong performance, jumping 4 per cent to $108.05 per ounce after reaching a record $117.69 on Monday. The metal has already gained 53 per cent so far this year, reflecting strong investor demand and tightening supply dynamics.
Other precious metals, however, saw pullbacks. Spot platinum fell 4 per cent to $2,647.39 per ounce after hitting a record $2,918.80 in the previous session, while palladium declined 1.4 per cent to $1,953.69 per ounce.