Gold is glittering on Wall Street as the traditional safe-haven asset topped the psychological milestone of $3,000 for the first time amid global uncertainty.
This year, gold prices have risen nearly 14 percent. The yellow metal will also register a weekly gain of about 3 percent.
Gold’s ascent to $3,000 on the New York Mercantile Exchange’s COMEX division did not happen overnight. It has rallied 39 percent over the last 12 months.
Silver, the sister metal, has also emulated the same upward trajectory for the past year, soaring 35 percent to above $34 an ounce. Year to date, the white metal has rocketed close to 18 percent and is on track for a weekly boost of more than 4 percent.
This starkly contrasts what has occurred in the broader financial markets over the last few weeks. The U.S. stock market has erased $5 trillion in value in three weeks due to growing tariff-fueled uncertainty in the wider economic landscape.
As a result of the bloodbath on the New York Stock Exchange this month, investors have been actively seeking shelter from the turbulence in conventional safe-haven assets such as gold and U.S. Treasury securities.
However, with the leading benchmark stock averages rebounding to finish the trading week, could gold prices hit a near-term roadblock?
“We see uncertainty over trade and tariffs continuing to buoy gold prices—and if trade tensions intensify and we see more retaliatory measures, safe-haven demand for gold will continue.”
The blue-chip Dow Jones Industrial Average bounced back by nearly 1 percent. The broader S&P 500 Index and the Nasdaq Composite Index also rose about 1 percent on Friday, a welcomed reprieve after the two indexes slipped into correction territory this week.
U.S. stocks received a jolt as the federal government will likely avoid a shutdown after Senate minority leader Chuck Schumer (D-N.Y.) indicated he would not block a government funding bill.
Dollar Assets
Meanwhile, in addition to trade-related consternation, gold has been finding support from a softer U.S. dollar and sliding Treasury yields.The U.S. Dollar Index (DXY), a gauge of the buck against a weighted basket of six foreign currencies, has tumbled more than 4 percent this year.
A weaker greenback is good for dollar-denominated commodities because it makes it cheaper for foreign investors to purchase.
While Treasury yields have been recovering in recent sessions, they have sharply dropped since hitting a mid-January peak. The benchmark 10-year yield is down about 50 basis points, to about 4.3 percent.
Lower interest rates diminish the opportunity cost—a missed potential gain from another investment alternative—of holding non-yielding bullion.
Various factors have influenced these trends, including expectations that the Federal Reserve will restart its easing campaign in the coming months if inflation continues to soften.
Fed chair Jerome Powell and his colleagues have signaled monetary policymakers are not in a hurry to cut interest rates as they wait for more cooling inflation data and trade policy clarity.
“We do not need to be in a hurry, and are well positioned to wait for greater clarity,” Powell said in prepared remarks at the U.S. Monetary Policy Forum last week. “Policy is not on a preset course. If the economy remains strong but inflation does not continue to move sustainably toward 2 percent, we can maintain policy restraint for longer.”
The policy-making Federal Open Market Committee will hold its two-day meeting next week and is overwhelmingly expected to leave rates unchanged at a range of 4.25–4.50 percent.
Central Bank Gold Bugs
One of the biggest gold bugs has been central banks.Central banks’ appetite for the precious metal continued to kick off 2025, the group noted. These institutions reported net purchases of 18 tons in January, led by Uzbekistan, China, and Kazakhstan. India and Poland also added to their gold stockpiles.
Marissa Salim, a senior research lead at the World Gold Council, says central banks are playing a critical role in worldwide gold demand, “influenced by both economic and geopolitical shifts.”
Central banks purchasing the yellow metal is comparable to insiders selling stock, says Peter Schiff, the chief economist and global strategist at Euro Pacific Asset Management.
“When those closest to a company dump their stock, retail investors often follow their lead,” Schiff said on social media platform X. “When those closest to the fiat system demonstrate a loss of confidence by dumping dollars, you'd be foolish not to follow suit.”
Reading the Metal Tea Leaves
Last month, Goldman Sachs Research projected that gold prices will increase to $3,100 by the year’s end, underpinned by solid gold demand from central banks. This was a revised forecast from $2,890.Gold prices could push higher if policy uncertainty persists, analysts say.
“If policy uncertainty remains elevated or sustained concerns about tariffs continue to drive demand for safe haven assets, the team predicts that speculative gold investing could push prices as high as $3,300 by December 2025,” the report said.
Jeffrey Gundlach, the CEO and CIO of DoubleLine, told investors on a recent call that gold will eventually reach $4,000.
“Gold continues its bull market that we’ve been talking about really now for a couple of years ever since gold was down to $1,800,” he said.
“I’d be so bold to say I think gold will make it to $4,000. I’m not sure that’ll happen this year, but I feel like that’s the measured move anticipated by the long consolidation at around $1,800 on gold.”
