Gold remains near record highs in US dollars this week, trading within just $10 of the all-time high earlier today.
Markets continue to be buffeted by the intensifying trade war. After tariffs were introduced on steel and aluminium this week (with another u-turn from President Trump from 50% back down to 25%) Canada and the EU have both promised retaliatory measures. With the President also pledging further reciprocal tariffs in response, the tit-for-tat nature of the trade war has prompted fears of recession around the world.
Dubbed a ‘Trumpcession’ by some, stock markets have tumbled this week as growth is expected to stall and prices rise. The Trump administration has done little to allay these concerns, stating the US economy is in a state of ‘transition’ as the tariffs take effect. European countries like Germany also face the risk of recession as they are impacted by the trade war.
In many ways gold has performed far better than expected so far in 2025. Inflation has fallen, bond yields have risen, and the US dollar is still up in the past six months (although it has now lost post-election gains), yet gold continues to rise. Similar to last year, this suggests significant buying pressure, although the source of this pressure is once again unclear.
In US dollars gold hit a peak of $2,948.29 per ounce this morning, and remains close to this level. With the US all-time high sitting at $2,958, gold could quite easily push to further records at any time in trading this week.
With the dollar falling from it’s recent highs however, other currencies are still some ways off their records. Gold remains below £2,300 in GBP, and just over €2,700 in Euros, down 2.6% and 3.2% respectively in the past month. If gold does pass the US record it will likely continue to meet resistance as it approaches the historic milestone of $3,000 per ounce.
There has been some optimism in markets over a possible ceasefire deal between Ukraine and Russia, but strikes have continued in the meantime, and it remains unclear how big a step this would be towards an end of the war.
With gold defying normal patterns however, it makes forecasting unclear. The price has already met many expectations for this year in the first two months. The pace of gains has slowed somewhat, but a period of consolidation would provide some welcome support at these historically high levels, resulting in a new baseline price for future gains to build from.
