Gold Holds Firm as Investors Worry About the Global Economy
Gold prices remained stable after a strong weekly gain as economic worries fueled investor interest in safe-haven assets.
Steady Prices Amid Economic Jitters
Spot gold hovered around $2,910 an ounce, maintaining last week’s 2% increase. Investors are closely watching global economic shifts, particularly in the U.S. and China. Former President Donald Trump acknowledged a “period of transition” in the American economy, reinforcing concerns over tariffs and job cuts. Meanwhile, China’s latest data indicates persistent deflation, adding to global market anxieties.
Gold’s Impressive Rally
Since the start of 2025, gold has been on a winning streak, setting multiple record highs and gaining consistently, except for one week. Investors have flocked to the metal as trade policy shifts under Trump’s administration create market uncertainty. Additionally, steady gold purchases by central banks and speculation about further U.S. interest rate cuts have fueled demand.
Federal Reserve Chair Jerome Powell admitted to increasing economic uncertainty but reassured markets that there is no immediate need for drastic policy changes. However, recent data from the Atlanta Fed’s GDPNow model suggests the U.S. economy could contract this quarter. Lower interest rates generally support gold prices, as the metal doesn’t generate interest itself.
Market Trends and Investor Behavior
“Concerns over weak U.S. economic data and potential recession have raised expectations for rate cuts, which supports gold prices,” said Zhu Shanying, an analyst at CITIC Futures Co. However, she noted that prices might remain range-bound until the Fed announces its next policy move later this month.
Investor confidence in gold remains high, as seen in bullion-backed exchange-traded funds, which have expanded for six consecutive weeks, reaching levels unseen since December 2023.
As of 2:02 p.m. in Singapore, spot gold stood at $2,910.40 an ounce, marking an 11% rise this year. The latest peak was recorded just above $2,956 last month. Meanwhile, the Bloomberg Dollar Spot Index steadied after its sharpest weekly decline since 2022. Other precious metals, including silver, platinum, and palladium, saw declines.
