Gold prices hit record high amid global uncertainty

DELHI Delhi: Gold prices jumped more than 6.5 per cent this week, hitting a record high of $3,237 per troy ounce.This is the metal’s strongest weekly performance since the early days of the Covid-19 pandemic, as global investors react to growing economic uncertainty following a new wave of US tariffs introduced by President Donald Trump.
The sharp jump in gold prices comes at a time when there is a sell-off in traditional safe-haven assets such as US stocks and Treasury bonds.At the same time, the US dollar has declined significantly, falling to a three-year low against the euro. These developments have made gold more attractive to investors looking for stability. Tensions escalated further on Friday when China responded to US tariffs by imposing a 125 per cent tariff on US imports. The move has raised fears of a full-blown trade war, prompting investors to seek safety in gold – a metal known to perform well in times of economic and geopolitical tensions. Market analysts say concerns over recession risk, rising bond yields and financial instability are driving investors towards gold.

Apart from individual investors, demand is also rising from institutions and central banks. Gold-backed exchange-traded funds (ETFs) saw their highest inflows since 2020 in the first quarter of this year.Central banks, especially in emerging markets, are buying more gold in an attempt to reduce their dependence on the dollar.In China, domestic demand has become so strong that buyers are paying a premium over international gold prices – a clear sign of growing concern in Asian markets over financial instability.Reflecting the change in market sentiment, global financial services company Union Bank of Switzerland (UBS) has raised its 12-month gold price forecast to $3,500 an ounce.