Gold held near $2,910 per ounce after advancing nearly 2% last week, driven by rising worries about the global economy.
The metal has been on an upward trend through early 2025, reaching several record highs as investors react to uncertainty around trade policy, increased central bank purchases and the prospect of Federal Reserve rate cuts.
Softening US economic data has reinforced markets’ expectations for additional rate reductions, a dynamic that tends to favor gold, which does not pay interest.
Market participants note that geopolitical tensions and slower global growth can boost demand for safe-haven assets, while central bank demand and investment flows into exchange-traded funds continue to support prices. At the same time, a potential decline in real yields makes gold more attractive compared with interest-bearing securities.
Analysts say the path for gold will depend on upcoming macroeconomic indicators, Fed communications and developments in global trade and geopolitical risk. If growth indicators remain weak and rate-cut expectations persist, the metal could sustain its gains. Conversely, a firmer-than-expected US economy or sharper moves in real yields could cap further advances.
Investors considering gold should weigh its role as a hedge against inflation and economic uncertainty against its lack of income and potential price volatility. Positioning in physical bullion, futures contracts or ETFs offers different trade-offs in cost, liquidity and storage. Risk management and a clear investment horizon remain important when adding gold exposure to a diversified portfolio.
Overall, the combination of policy expectations, central bank activity and lingering economic concerns appears to be keeping gold prices elevated as market participants evaluate the balance between risk appetite and safe-haven demand.