With the Federal Reserve’s hint at rate reduction this year and safe-haven demand stemming from geopolitical and economic uncertainties, gold stayed steady on Friday, trading below its record high from the previous session.
Underlying Factors
- As of 0030 GMT, spot gold GOLD remained steady at $3,043.89 an ounce. In the previous session, the price of gold hit a record high of $3,057.21 per ounce. It has increased by about 2% this week.
- U.S. gold futures GOLD increased to $3,051.90, up 0.3%.
- Israel, essentially abandoning a two-month-old truce, resumed bombing and ground operations in Gaza on Thursday, killing at least 91 Palestinians and injuring scores more in bombings throughout the territory, according to the health ministry of the enclave.
- Federal Reserve Chair Jerome Powell stated on Wednesday that the Trump administration’s first actions, such as hefty import tariffs, seem to have skewed the U.S. economy towards slower growth and at least temporarily higher inflation.
- The Fed maintained the 4.25%–4.50% range for its benchmark overnight rate on Wednesday. By the end of the year, policymakers anticipate that the central bank will lower interest rates by two quarter percentage points.
- Gold has reached 16 record highs in 2025, four of which have surpassed the critical $3,000 per ounce threshold, thanks to a tornado of economic and geopolitical upheaval.
- Expectations of interest rate reduction, market worries about tariff uncertainties, and the resurgence of Middle Eastern tensions, which were triggered by Israel’s airstrikes in Gaza, have all contributed to the record gain.
- Traditionally seen as a hedge against economic and geopolitical uncertainty, non-yielding gold prospers in an environment with low interest rates.
- Palladium (XPDUSD1!) eased 0.2% to $950.47, platinum (PL1!) solidified 0.1% to $985.55, and spot silver (XAGUSD1!) dropped 0.3% to $33.45 an ounce.
