(Kitco News) - Significant financial market uncertainty and geopolitical turmoil have pushed gold prices to new record highs above $2,800. And while speculative positioning appears slightly overbought, analysts say the precious metal remains well-supported in the near term.
The gold market is on track to end Friday with its fifth consecutive week of gains. As of 3:05 p.m. ET, April gold futures were trading at $2,827.50 per ounce, up nearly 2% from last week’s close.
In a note Friday, David Morrison, Senior Market Analyst at Trade Nation, wrote that gold’s momentum indicators are pushing towards overbought territory, but they still remain below October’s peak.
Not only is gold at an all-time high, but Comex gold is also trading at a significant premium to the spot market — one of the factors driving prices higher.
Gold and silver have been flooding into New York vaults at an unprecedented pace as bullion banks and market participants prepare for potential U.S. tariffs under President Donald Trump against Mexico and Canada—two of the world’s largest silver producers.
According to commodity analysts at BMO Capital Markets, citing Swiss gold export data, 64.2 tonnes of gold flowed into Comex vaults in New York in December, a 19.5-fold increase from the 3.3 tonnes imported in December 2023.
“This is the highest monthly gold flow from Switzerland to the U.S. since March 2022,” the analysts noted.
Markets have been preparing for tariffs to take effect on Saturday, though the exact details remain unclear. While gold and silver may experience some profit-taking early next week as investors adjust to the new global trade landscape, some analysts advise keeping an eye on broader market trends.
“The dislocation between London and New York prices will eventually resolve itself, but until we have clarity on tariffs, the premium has created a very profitable trade for those who can access physical gold and ship it into the U.S. market,” said Ole Hansen, Head of Commodity Strategy at Saxo Bank. “If no tariffs are applied, we may see profit-taking as a result. Overall, the prevailing uncertainty and continued central bank buying will likely keep a floor under the market for now.”
Naeem Aslam, Chief Investment Officer at Zaye Capital Markets, remains bullish on gold, even if Trump’s tariff threats prove to be more bark than bite.
“If the tariff threat materializes, it could strengthen the U.S. dollar, which typically puts downward pressure on gold. However, if the situation is resolved quickly or deemed less impactful, gold may maintain its momentum. In any case, it’s important to monitor how global investors react to such developments. A pullback is possible, but any movement would likely be short-term, with broader market dynamics—including inflation concerns and central bank policy—playing a key role in sustaining gold's value in the medium to long term,” he explained.
At the same time, a pullback in gold prices would not be unwelcome, as many view any dip as a buying opportunity.
Joy Yang, Global Head of Index Product Management at MarketVector, expects some volatility in gold’s speculative positioning. However, she emphasized that this does not alter the precious metal’s long-term outlook.
“It’s not just about specific tariffs, or whether they happen or not. At some point, another surprise will emerge that markets aren’t prepared for,” she said. “Markets just don’t know how to navigate this environment, so it makes sense for gold prices to remain above $2,800 per ounce.”
Beyond Trump-induced geopolitical uncertainty, markets will closely watch upcoming economic data next week to gauge the Federal Reserve’s monetary policy direction.
On Wednesday, after leaving interest rates unchanged, Federal Reserve Chair Jerome Powell stated that the central bank is in no hurry to cut rates, citing persistent inflation pressures and a resilient labor market.
U.S. core Personal Consumption Expenditures (PCE) showed inflation rising 2.8% over the past 12 months, unchanged from October and November’s readings. While inflation remains stable, albeit elevated, analysts warn that tariffs and a potential trade war could quickly drive prices higher.
With inflation data now accounted for, investors will turn their attention to the labor market next week, particularly Friday’s release of nonfarm payroll numbers.
Bill Adams, Chief Economist for Comerica Bank, noted that a cold snap in January may have weighed on employment growth, potentially prompting markets to anticipate more easing from the Federal Reserve.
Economic data to watch next week:
Monday: ISM Manufacturing PMI
Tuesday: U.S. JOLTS Job Openings
Wednesday: ADP employment report, ISM Services PMI
Thursday: Bank of England monetary policy decision, U.S. weekly jobless claims
Friday: U.S. Nonfarm Payrolls, Preliminary University of Michigan Consumer Sentiment
