Gold prices hit record high amid inflation and geopolitical uncertainty

Gold prices have soared to an all-time high, surpassing USD 2,900 per ounce this month, continuing a remarkable rally that has seen the precious metal rise 12% since the start of the year, agency reports said on Thursday.

This surge has outperformed major stock indices, with the S&P 500 up only 4% and the ASX 200 gaining just 2% over the same period.

The rally follows a stellar 2024, during which gold prices jumped 27%, the largest annual increase in 14 years.

Several factors have driven this surge, including heightened geopolitical uncertainty, inflation concerns, and a shift in global trade policies.

Notably, US President Donald Trump’s tariff threats have fueled fears of rising inflation, further boosting gold’s appeal.

A key driver of recent price movements has been central bank demand. Governments worldwide have increased gold purchases, with 2022 marking a record 1,082 tonnes in acquisitions, followed by strong demand in 2023 and 2024.

This shift suggests a move away from US dollar reserves, reinforcing gold’s role as a currency hedge.

Gold’s status as a safe haven asset has historically driven its appeal during times of crisis.

The latest price surge may signal growing investor unease about economic stability and geopolitical risks, painting an uncertain picture for global markets in 2025.