Gold prices reached a historic high on Friday, marking a fourth consecutive week of gains driven by geopolitical tensions and economic uncertainties, particularly concerning China.
Spot gold surged by 0.9% to $2,394.87 per ounce, reaching a peak of $2,400.35 earlier in the day. This surge represents a nearly 3% increase for the week. U.S. gold futures also saw a notable rise, climbing by 1.6% to $2,411.70.
Analysts attribute the bullish trend in gold prices to increased demand for safe-haven assets amidst escalating geopolitical conflicts and concerns about the Chinese economy. Ricardo Evangelista, senior analyst at ActivTrades, highlighted the potential for further upside in gold prices, citing central bank purchases and growing investor anxiety.
Recent events, such as Iran’s pledge for retaliation following an airstrike on its embassy compound in Damascus and ongoing tensions in the Middle East due to the Gaza war, have contributed to global instability, further fueling demand for safe-haven assets.
The rise in oil prices, up by 2% on Friday, also reflects the heightened geopolitical risks, with concerns about potential supply disruptions in the Middle East overshadowing reduced expectations for U.S. interest rate cuts.
Meanwhile, efforts by central banks in Vietnam and China to stabilize the gold market by increasing gold bar supplies and adding to gold reserves, respectively, have underscored the importance of gold as a hedge against economic uncertainties.
Investors are closely monitoring economic indicators, including China’s shrinking exports and imports in March, as well as softer-than-expected U.S. Producer Price Index (PPI) data, following a hot Consumer Price Index (CPI) report for March.
In the precious metals market, spot silver also experienced significant gains, rising by 2.3% to $29.13 per ounce, reaching its highest levels since early 2021. Platinum and palladium also saw modest increases, with both metals on track for weekly gains.
The strength in gold prices has had a positive impact on silver, supported by indications of industrial demand for the metal. Analysts remain optimistic about the outlook for precious metals amid ongoing economic uncertainties and geopolitical tensions.
