Gold surpasses $3K per ounce first time ever

• Published On: 16 March 2025 at 19:38

Gold prices surpassed the historic $3,000 per ounce mark for the first time on Friday, extending a record-breaking rally fuelled by rising trade tensions and growing expectations of US interest rate cuts, reinforcing the metal's status as a safe-haven asset.

Gold prices rose 0.4% to $3,000.39 per ounce as of 10:31 GMT. This milestone comes after gold reached 13 all-time highs this year alone, with a projected gain of more than 14% in 2025.

The Kobeissi Letter, a well-known global market commentary, confirmed the record-breaking surge on social media, writing: "Gold prices have officially crossed above $3,000/oz for the first time in history."

Over the last year, the rise in gold has outpaced that of other major asset classes. Since March 2024, the S&P 500 has gained 11%, while gold has risen nearly 44%. Even though the S&P 500 has fallen 5% year to date, gold has risen 10% since the beginning of 2025.

The rally is showing no signs of slowing. Since President Trump's inauguration on January 20, gold prices have risen by about 10%, from $2,620 at the start of the year. So far in 2025, the precious metal has set 12 new record highs, following a 27% increase in 2024.

"Amid escalating geopolitical tensions, rising trade tariffs, and growing financial market uncertainty, investors are increasingly seeking stability—and they are finding it in gold," said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany. "While breaking the $3,000 barrier could trigger short-term profit-taking, the broader trend remains strong."

The ongoing global trade war has contributed to gold's record high. President Trump's threat to impose a 200% tariff on European alcohol imports on Thursday heightened market volatility, pushing investors even further towards gold.

At the same time, falling inflation data in the United States has fuelled speculation that the Federal Reserve will cut rates. Lower interest rates tend to make non-yielding assets such as gold more appealing.

The Fed's next policy meeting is scheduled for Wednesday, and rates are widely expected to remain unchanged. However, traders are betting that policymakers will resume cutting borrowing costs in June.

"Next week's FOMC decision, along with Chair Jerome Powell's signals, will determine whether spot gold remains above or below $3,000," said Han Tan, chief market analyst at Exinity Group.

Investor demand for gold remains strong. The SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, recently reported holdings of 905.81 metric tons — its highest level since August 2023.

Physical demand is increasing as well. In January, US gold imports reached a record $30.4 billion, more than doubling levels during the pandemic.

ANZ analysts remain optimistic about the gold price's trajectory. "We maintain our bullish stance on gold, with prices expected to reach a record high of $3,050 per ounce in 2025," the researchers said.

While a drop below $3,000 could see gold test support levels at $2,900 or $2,880, analysts anticipate that any pullbacks will be met with strong buying interest given the current momentum.

Historically, gold prices have increased in response to a weaker dollar and lower interest rates. However, the current rally has defied expectations, with gold rising alongside high interest rates, a strong US dollar, and a buoyant stock market.