**********Gold prices riserecord highDriven by global trade concernsHedge demand
The price of gold has broken through $2940 per ounce, setting a new historical record and approaching the testing threshold of $3000. This upward trend is due to US President Donald Trump's imposition of tariffs on US steel and aluminum imports, further exacerbating global market uncertainty and triggering an increase in safe haven demand.
Trump's imposition of tariffs intensifies global trade concerns
Trump stated on Monday that this round of new tariffs will help strengthen domestic production and create more job opportunities. He also warned that tariffs "may further increase".
The upward trend of gold has continued for nearly 12%, setting new records continuously, which is closely related to Trump's tough measures on trade and geopolitics, further consolidating the position of gold as a store of value. At the same time, traders are also paying attention to the potential impact of this series of policies on the US economy and monetary policy, especially whether the White House's policies will reignite inflation and suppress economic growth.
Investors will focus on Federal Reserve Chairman Jerome Powell's remarks on monetary policy during his congressional testimony on Tuesday and Wednesday. The short-term inflation expectations in the United States have risen to the largest gap between long-term expectations since 2023, with the so-called five-year break even rate reaching 2.64% on Monday. This change may support the argument that the Federal Reserve is slowing down its easing pace, which theoretically could be unfavorable for gold as it does not pay interest.
The rise in gold prices is closely related to the inflow of ETF funds
The rise of gold is closely related to the inflow of funds into exchange traded funds (ETFs) supported by gold. According to market research, global gold holdings have increased in six out of the past seven weeks, reaching their highest level since November last year on Monday.
Multiple banks predict gold price to challenge $3000
Multiple banks predict that the price of gold will face a challenge of $3000 per ounce. Citibank stated last week that it expects gold to reach this price level within three months, as geopolitical tensions and trade concerns will further drive gold demand.
In addition, the central banks of major Asian countries expanded their gold reserves for the third consecutive month in January, indicating that even at historic high gold prices, these countries are actively diversifying their asset allocation. Asian powers have also announced a pilot program that allows 10 major insurance companies to invest up to 1% of their assets in gold for the first time, which could mean approximately $30 billion in funding and is expected to support the gold market.
Currently, spot gold is up 0.33% at 10:21 Beijing time, with a slight decline to $2917.03 per ounce, having previously touched $2942.
Editor's viewpoint: The sustained rise in gold prices is not only a response to global trade concerns, but also highlights the market's need for hedging against uncertainty and risk. With the continuous increase in gold reserves of central banks around the world and investors' high attention to the future direction of monetary policy, the role of gold as a hedging asset has become increasingly prominent. In the future, with the changing international situation, it is worth continuing to observe whether the price of gold can break through the $3000 mark.
