(Kitco News) - The gold market has hit another major milestone on Friday morning with the spot market briefly breaking above $3,000 an ounce to set a new all-time high of $3,005.04 just as many North American traders had their first cup of coffee.
Gold’s breakout started late Thursday after consolidating around $2,900 for the last three weeks. Overnight, the yellow metal traded in a narrow range but hit a high of $2,999.99. While gold is down from its session highs, it is still holding on to modest gains. Spot gold last traded at $2,999.10 an ounce, up 0.35% on the day.
The spot market was slightly slower to hit the $3K mark, as gold futures achieved that feat late Thursday.
Analysts have been anxiously waiting for this run to $3,000 since the start of the year, and some anticipated that this key level would trigger some profit-taking. However, market sentiment remains fairly bullish, and a growing number of analysts are starting to increase their price targets for the year.
Many analysts have said that growing global economic uncertainty and geopolitical turmoil continue to support gold prices, even at these elevated levels.
“Gold breaching the psychologically significant $3,000 level is a direct response to escalating trade tensions and the growing economic uncertainty that this brings. Trump’s latest tariff threat, a potential 200% duty on EU alcohol imports, has sent further shockwaves through global markets, fuelling demand for safe-haven assets,” said Paul Williams, Managing Director of Solomon Global – a specialist supplier of certified gold and silver bars and coins, in a comment to Kitco News. “This isn’t just a knee-jerk reaction to individual policies; it’s investors seeking protection against systemic risk. Given the current momentum, gold at $3,500 by summer and $4,500 within the next year are in the realms of possibility. With the Trump tariff turmoil spooking markets once again, gold is being chosen as the ultimate shield against political and economic unpredictability.”
In a comment to Kitco News, Stuart O’Reilly, Market Insights Manager at The Royal Mint said that many investors are turning to gold as a safe-haven hedge.
“While equity markets have been rocked in recent weeks, safe-haven asset classes like gold are on a tear. This has driven the price of gold not only to record highs, but helped it crash through the $3,000.00 per Troy ounce ceiling,” he said. “Buoyed by the prospect of continuing global trade tensions, and supported ongoing purchasing by Central Banks, in sterling terms, the yellow gold has risen by over 9% since the start of this year as it heads deeper into bull market territory.”
Alex Kuptsikevich, Chief Market Analyst at FxPro, said that weaker inflation pressures this past week are also helping to fuel gold’s rally. This gives the Federal Reserve room to cut interest rates this year, and markets are currently pricing in two potential rate cuts later this year.
This past week, both the Consumer Price Index and Producer Price Index showed lower-than-expected inflation in February. However, some economists are looking past the data, as it was captured before the U.S. ignited a global trade war.
Kuptsikevich added that he could see gold prices consolidate after hitting $3,000, but he noted that the bulls have momentum.
“On the tech analysis side, we see a typical resumption of growth after a corrective pullback,” he said. “The potential target of this growth impulse looks like the area of $3,190. A more distant growth target looks like the area of $3,400.”
David Morrison, Senior Market Analyst at Trade Nation, said that gold could see some consolidation in the near term after hitting these historic prices.
“It takes time for traders to get comfortable trading in uncharted territory. It will be very interesting to see how gold behaves going into the weekend. It’s worth noting that it is far from being overbought at current levels,” he said.
At $3,000 an ounce, the iconic 400oz gold bar is now worth $1.2 million dollars.
