Gold Nears Record $3,000 as Market Uncertainty Fuels Safe-Haven Demand
Market Turmoil Sparks Stronger Gold Demand Amid Economic Uncertainty
By Falito Villienuve Tandra, Jason Alexander, Muhammad Fazli Rabbaani, Aisyah Rizki Adinda, and Valda Alesia Darmica
March 14, 2025 at 16:30 GMT+7
Gold surged 1.6% to US$2,979.76 per ounce, marking its twelfth record high this year after closing 2024 with 46 record highs—its strongest year in over a decade. The rally is driven by strong central bank purchases, a weakening US dollar, geopolitical tensions, and tariffs on key US allies imposed by President Trump.
Investors are also reacting to cooling US consumer prices, which have fueled speculation that the Federal Reserve may ease monetary policy. After cutting interest rates by 100 basis points last year, the Fed has since paused further adjustments.
Traders now await the US Producer Price Index (PPI) data for further direction. A weaker-than-expected reading could strengthen expectations of additional rate cuts, further supporting gold, while a stronger report might limit its gains.
1 Kilo Gold Bar Illustration | Source: Reuters / Leonhard Foegers
President Donald Trump’s tariff threats on European imports have heightened market volatility, driving investors toward gold as a safe-haven asset. In early 2025, Trump proposed tariffs of up to 20% on European automobiles and luxury goods, creating uncertainty in global markets.
Meanwhile, the Federal Reserve’s decision to maintain interest rates at 4.25%–4.50%—after cutting them by 100 basis points in 2024—has strengthened gold’s appeal by keeping the opportunity cost of holding non-yielding assets low.
Additionally, inflation remains a concern, with US consumer prices rising 2.8% year-over-year in February 2025, prompting investors to hedge against potential economic downturns. These factors have fueled a surge in gold demand, pushing prices to new highs. As geopolitical tensions and economic uncertainty persist, gold continues to solidify its role as a preferred store of value for investors worldwide.
Spot gold price in USD per oz | Source: LSEG
Looking ahead, analysts forecast gold to trade between US$3,000 and US$3,200 per ounce in 2025, supported by persistent economic and geopolitical uncertainties. Market instability, driven by trade tensions, inflation concerns, and shifting monetary policies, continues to bolster demand for safe-haven assets.
Additionally, the possibility of further monetary easing by the Federal Reserve remains a key factor sustaining gold’s upward momentum. With global economic conditions remaining uncertain, investors are increasingly turning to gold as a hedge against inflation and market volatility.
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As a result, gold is expected to maintain its strong performance throughout the year, reinforcing its role as a reliable store of value in times of financial and geopolitical uncertainty.
Sources:
CNBC
Reuters
WSJ
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