Gold prices surged to all-time highs during trading on Tuesday, February 4, reaching unprecedented levels as escalating trade tensions between the United States and China drove investors toward safe-haven assets.
Factors Driving Gold’s Rise
- Escalation of the Trade War: Gold prices climbed after China imposed new tariffs on U.S. imports in response to the tariffs implemented by the U.S. administration.
- Weaker Dollar: The U.S. dollar index fell by 0.9%, making gold more attractive to investors holding other currencies.
- Economic Concerns: U.S. data indicated a decline in job openings to 7.6 million in December, compared to expectations of 8 million, raising fears of an economic slowdown.
Gold and Precious Metals Performance
- Spot gold prices increased by 1.1% to $2,844.56 per ounce, after reaching a record high of $2,845.14.
- U.S. gold futures rose 0.7% to settle at $2,875.80 per ounce.
- Other precious metals:
- Silver climbed 2.5% to $32.33 per ounce.
- Platinum gained 0.4% to $967.94 per ounce.
- Palladium fell 1.3% to $994 per ounce.
Future Outlook for Gold
With growing geopolitical uncertainties and economic instability, expectations are rising that gold prices may continue to surge, possibly reaching $3,000 per ounce this year. Additionally, central banks may increase gold purchases to diversify their reserves away from the U.S. dollar.
Market Focus on U.S. Employment Data
Investors are currently anticipating the release of the ADP private-sector jobs report on Wednesday, along with the non-farm payrolls report on Friday. These data points could influence the Federal Reserve’s monetary policy and interest rate decisions, ultimately affecting gold’s future performance.
