Gold Extends Historic Rally as Global Uncertainties Fuel Safe-Haven Demand

Gold prices have marked their eighth consecutive week of gains, pushing the precious metal to unprecedented heights amid growing global uncertainties and robust central bank buying. The April gold futures contract settled at $2,950, securing a weekly advance of $56.30 or 1.95%, and briefly touching a new all-time intraday high of $2,973.40 on Thursday.

Since December 30, gold has demonstrated remarkable strength, accumulating an impressive gain of about $300 per ounce. The rally has been particularly notable in recent days, with prices holding steady near record levels, though the relationship between closing prices have remained notably tight. 

The sustained upward momentum in gold prices is largely attributed to mounting safe-haven demand, driven by geopolitical tensions and policy uncertainties. Philip Newman, managing director at precious metals consultancy Metals Focus, notes that "High levels of safe-haven demand driven by President Trump's tariff strategy and recent developments in Ukraine have underpinned much of the recent price gains."

Market concerns have intensified following controversial statements by Trump regarding Ukrainian President Volodymyr Zelensky and Russia's invasion of Ukraine, straining relationships between the United States and some European countries. Additionally, while Trump's threatened tariffs on Canada and Mexico have been temporarily postponed following early February agreements, the broader implications of his trade policies continue to weigh on market sentiment.

These concerns are reflected in declining U.S. consumer confidence, as measured by the University of Michigan's index of consumer sentiment in February, with Americans increasingly worried about the potential impact of tariffs on consumer prices.

Ole Hansen of Saxo Bank observes that "The strong underlying momentum in gold's rally and the 'fear of missing out' are being augmented by persistent end-user demand from central banks and individual investors seeking protection in an increasingly unstable-looking world." This sentiment is evidenced by substantial inflows into bullion-backed exchange-traded funds, with the world's largest gold ETF recording its most significant weekly increase in holdings since 2023, adding over 20 metric tons in just three trading days.

The combination of central bank accumulation, strong institutional investor interest, and persistent geopolitical uncertainties suggests that gold's appeal as a safe-haven asset remains robust, potentially supporting further price advances in gold.

Wishing you, as always good trading,