Gold Exceeds $2,800, Hits All-Time High

Three 1-kilogram gold bullion bars at a gold dealer's shop in Birmingham, England, on Dec. 13, 2023. Christopher Furlong/Getty Images

Gold prices hit a record high on Friday as concerns about President Donald Trump’s potential tariffs on foreign nations fueled investor interest in the bullion.

In early morning trade on Friday, spot gold prices breached the $2,800 per oz. level, hitting an all-time high of $2,807.59 before slightly coming down to $2,804.71 as of 08:10 a.m. ET. Earlier on Jan. 30, spot gold had risen by nearly 1.4 percent after opening at around $2,757. On Thursday.

Trump said he plans on imposing tariffs on Mexican and Canadian imports beginning Feb. 1.

“I’ll be putting the tariff of 25 percent on Canada and Mexico, and we will really have to do that because we have very big deficits with those countries,” Trump told reporters at the Oval Office, adding that “those tariffs may or may not rise with time.”

Jim Wyckoff, a senior market analyst at Kitco Metals, said, “We are seeing keener uncertainty and anxiety about the Trump administration’s new policies on trade and foreign policy ... fresh technical buying coming in as prices are trending higher now in both gold and silver.”

Tariffs are being implemented for several reasons, including the trade deficits with the two nations, an influx of illegal immigrants at America’s border with Mexico, and fentanyl trafficking.

On Thursday, Trump mentioned a 10 percent additional tariff on China, which he earlier said was to penalize Beijing for its inaction regarding fentanyl manufacturing.

“China is going to end up paying a tariff also for that and we’re in the process of doing that ... we'll make that determination what it’s going to be,” the president said.

Gold’s appeal was boosted by the fourth-quarter U.S. GDP estimate released on Thursday. Data showed the United States had grown by 2.3 percent in the fourth quarter, lower than the market expectations of 2.5 percent.

Fourth-quarter growth was the lowest of the four quarters, with the second quarter seeing a 3 percent growth and the third quarter registering a gain of 3.1 percent.

The U.S. dollar index declined slightly on Thursday, making gold less expensive for investors in other currencies.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said that “gold is shining as a safe haven asset, with investors seeking shelter to weather the storm of unpredictability.”

2025 Expectations

According to a December 2024 forecast by chemical manufacturing company Heraeus Precious Metals, gold is expected to continue its bull run in 2025.

While geopolitical risks such as Ukraine and the Middle East continue to support gold prices, Trump’s economic policies could “reignite inflation” in the United States, contributing to the yellow metal’s upward trajectory, the company said.

“The US government continues to run significant budget deficits, the US debt keeps growing and interest payments have skyrocketed. While the recent interest rate cuts ease this pressure somewhat, there are no signs of a reduction in government spending,” it said.

“So the US will probably have to inflate away the debt, which would ultimately be beneficial for gold. Heraeus expects a range of 2,450 to 2,950 dollars per troy ounce.”

Despite positive expectations for gold, the company anticipates silver to be the best-performing precious metal relatively.

JP Morgan is also positive on gold. Gregory Shearer, head of base and precious metals strategy at the company, said that macro scenarios for gold still “skew bullish” and forecast prices to rise close to $3,000 per oz. this year.

ING Bank predicts gold to hit “new record highs” in 2025, citing strong purchasing by central banks around the world.

“Central banks are set to continue to ease monetary policy, and there could be a move to safe haven assets due to an escalation in trade tensions. We also believe that central banks will remain strong buyers of gold as they look to diversify their reserves,” it said.

However, central bank gold purchases lagged in 2024. In the first three quarters of last year, central bank gold buying came in at 694 tons, according to data from the World Gold Council. This was 17 percent below the “record” first three quarters of 2023.

“It now looks increasingly likely that while central banks will remain healthy net purchasers in 2024, the full-year total will fall short of the previous two years,” the council said.

Third-quarter demand for gold from central banks, while remaining healthy, was “likely impacted by higher prices,” it said.

Reuters contributed to the report.