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Gold Scales Record Peak as Fed Signals Two Rate Cuts in 2025

Gold necklaces sit in a display case at a Laopu Gold jewelry store in Beijing, China March 12, 2025. REUTERS/Florence Lo
Gold necklaces sit in a display case at a Laopu Gold jewelry store in Beijing, China March 12, 2025. REUTERS/Florence Lo
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Gold Scales Record Peak as Fed Signals Two Rate Cuts in 2025

Gold necklaces sit in a display case at a Laopu Gold jewelry store in Beijing, China March 12, 2025. REUTERS/Florence Lo
Gold necklaces sit in a display case at a Laopu Gold jewelry store in Beijing, China March 12, 2025. REUTERS/Florence Lo

Gold touched an all-time high on Thursday as the US Federal Reserve signaled two possible interest rate cuts this year, adding to the bullion's appeal amid ongoing geopolitical and economic tensions.
Spot gold held steady at $3,047.1 an ounce as of 0700 GMT, after hitting a record high of $3,057.21 earlier in the session.
US gold futures gained 0.4% to $3,054.10, Reuters reported.
Gold is driven by "a lot of uncertain market situations, geopolitical tensions, weaker US dollar and expectations that interest rates will be cut later", said Dick Poon, general manager at Heraeus Metals Hong Kong Ltd.
On Wednesday, the Fed left its benchmark rate unchanged in the 4.25%-4.50% range, as was widely expected. Policymakers anticipate two quarter-percentage-point cuts by the end of 2025.
Non-yielding bullion thrives in a low interest rate environment.
US President Donald Trump's initial policies, including tariffs, appear to have tilted the US economy towards slower growth and higher inflation, at least temporarily, Fed Chair Jerome Powell said.
Trump's tariffs have flared trade tensions and are widely seen as inflationary and detrimental to economic growth.
The tariff uncertainty, rate cut possibilities and escalating tensions in the Middle East have contributed to gold's rally, prompting it to notch 16 record highs so far in 2025, with four being above the $3,000 milestone.
On Thursday, 37 Palestinians were killed in Israeli airstrikes across Gaza, after Israel resumed its bombing campaign.
"For now, gold's appeal as a safe haven and inflation hedge has further strengthened in light of those geopolitical concerns and tariff uncertainty. We remain constructive on the outlook of gold," said OCBC forex strategist Christopher Wong.
Geopolitical and economic uncertainties underscore gold's role as a store of value.
"Given the very good performance in gold through Q1, I think a correction is not out of the question," said Nicholas Frappell, global head of institutional markets at ABC Refinery.
"So far, corrections have been relatively short-lived and well bid... $3,090-$3,100 may see some resistance."
Spot silver was flat at $33.8 an ounce, platinum fell 0.3% to $989.85. Palladium slipped 1% to $949.50.

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Stocks Drop as Fresh Trade News Awaited, Oil Down on Iran Hopes

Oil prices have dropped after an adviser to Iranian supreme leader Ayatollah Ali Khamenei said Tehran could be open to meeting some demands over its nuclear program. KHAMENEI.IR/AFP
Oil prices have dropped after an adviser to Iranian supreme leader Ayatollah Ali Khamenei said Tehran could be open to meeting some demands over its nuclear program. KHAMENEI.IR/AFP
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Stocks Drop as Fresh Trade News Awaited, Oil Down on Iran Hopes

Oil prices have dropped after an adviser to Iranian supreme leader Ayatollah Ali Khamenei said Tehran could be open to meeting some demands over its nuclear program. KHAMENEI.IR/AFP
Oil prices have dropped after an adviser to Iranian supreme leader Ayatollah Ali Khamenei said Tehran could be open to meeting some demands over its nuclear program. KHAMENEI.IR/AFP

Equities stuttered Thursday as investors await fresh developments in trade talks, with US partners looking to reach deals to avoid Donald Trump's tariff blitz, while oil extended losses on hopes for an Iran nuclear deal.

With excitement from the China-US detente running out of legs, the search is on for fresh catalysts to drive a rally that has pushed markets back above the levels seen before US President Trump's April 2 "Liberation Day" bombshell, AFP said.

News that Beijing was suspending some non-tariff countermeasures on US entities for 90 days following the superpowers' weekend truce did little to inject much more enthusiasm.

With the tariffs crisis calmed for now, dealers can turn their attention to hard economic data, hoping for an idea about the initial impact of Washington's trade policies.

After figures Tuesday showing US inflation came in a little below forecasts in April, eyes are on wholesale prices and retail sales due later Thursday, as well as earnings from retail giant Walmart.

However, analysts pointed out that the real impact would not be seen until May's figures are released and warned that there were still plenty of bumps in the road ahead.

"The trade truce may hold for now, but the tariffs announced -- many still around 30 percent -- are not disappearing," said Charu Chanana, chief investment strategist at Saxo.

"These are 'sticky' policies that can reshape supply chains, corporate margins, and even inflation. In fact, the market is now preparing for a second shock: weaker economic and earnings data in the third quarter as tariffs bite."

She added that "the muted market reaction the day after the truce suggests investors may be digesting the idea that 'the best news may already be out'".

While Wall Street enjoyed a broadly positive day, with the S&P and Nasdaq up but the Dow down, Asia largely reversed.

Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Wellington, Taipei and Manila were all down.

Oil prices sank around two percent on signs that Iran could agree to certain US demands to reach a nuclear deal.

An adviser to supreme leader Ali Khamenei said Wednesday that Tehran could accept far-reaching curbs on its atomic program in exchange for sanctions relief, according to NBC News.

Ali Shamkhani said in an interview that his country could agree to never develop nuclear weapons, give up stockpiles of highly enriched uranium and allow inspectors to nuclear sites -- among other steps -- if economic sanctions were lifted, NBC said.

The commodity had already dropped Wednesday on bets that demand would increase as tensions between China and the United States ease and the tariffs are wound back.