Gold Hit $3,000 For the First Time Amid Geopolitical Instability

The continuous surge in gold prices has pushed the precious metal above the significant $3,000 per ounce threshold for the first time on March 14, 2025, driven by geopolitical and economic instability that has prompted investors to flock to the safe-haven asset.

On Friday, March 14, 2025, spot gold reached a historic $3,004.86 per ounce, marking its 13th all-time high in 2025. Prices have already risen by 14% this year, following a 27% increase in 2024.

Concerns over tariffs are fueling inflation fears and trade tensions, further driving investors toward gold as a hedge against risk.

At the same time, gold stocks in COMEX-approved warehouses reached a record 40.56 million ounces, as traders moved to cover their positions amid tariff-related uncertainty. However, inflows have slowed in recent weeks.

Federal Reserve Actions

Traders are now betting on U.S. Federal Reserve rate cuts, with expectations rising to three quarter-point reductions this year, up from two just days ago.

Since September, the Fed has cut rates by 100 basis points, pausing in January, but markets now anticipate further cuts starting in June. This has kept pressure on the dollar, a sharp contrast to the period when Trump’s protectionist policies bolstered the currency.

ETF Demand

According to February data from the World Gold Council, investor demand for gold is surging, with physically-backed gold exchange-traded funds (ETFs) seeing their largest weekly inflow since March 2022.

The SPDR Gold Trust (GLD), the world’s largest gold-backed ETF, saw holdings rise to 907.82 metric tons by February 25, the highest level since August 2023.

Central Bank Demand

Gold’s rally is also being supported by increasing central bank demand. Analysts expect that continued strong buying in 2025 could drive prices to new records as countries stockpile the metal in response to economic uncertainty.

China’s gold reserves marked four consecutive months of buying in February. After an 18-month buying spree, the central bank paused for six months in 2024 before resuming purchases in November.

Given the persistent U.S. budget deficit, gold could potentially reach highs of around $3,500, according to a note from Macquarie. Goldman Sachs has raised its 2025 year-end target for gold to $3,100.

Central banks purchased over 1,000 tons of gold for the third consecutive year in 2024. In the final quarter of 2024, as Trump’s election win rattled markets, central bank buying surged 54% year-on-year, according to the World Gold Council’s latest report.

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