【MACRO Alert】Gold prices soared - market competition and outlook driven by risk aversion

Recently, the global financial market has shown a complex and changing situation under the intertwined influence of trade tensions and economic uncertainty, and the price of gold has continued to rise against this background, becoming the focus of the market. On Friday, spot gold continued to rise in the European session and successfully stood at $ 3,080 /ounce, breaking the historical record again. New York gold futures also stood at $3,100/ounce.

From the perspective of price performance, the gold market has achieved remarkable results. On Thursday, the spot gold price rose by 1.2% to $3,054.72 per ounce, hitting an intraday high of $3,059.5. The cumulative increase this year exceeded 16%, and it has set a new record 17 times. COMEX gold futures also performed strongly, rising by 1.1% to $3,056.10, hitting an intraday high of $3,065.50, of which the June contract even stood above the $3,100/ounce mark, with an intraday increase of more than 1.5%.

The main driver of the surge in gold prices is global trade tensions. US President Donald Trump announced a 25% tariff on imported cars, a move that triggered strong reactions from countries from Canada to Europe, with governments threatening retaliation, global stock markets falling and many automakers' stocks suffering heavy losses. Not only that, Trump also plans to announce reciprocal tariffs on countries he has identified as the main cause of the US trade deficit, which has exacerbated market concerns about the expansion of the trade war .

Investors' risk appetite is greatly affected . Under this uncertainty , gold, as a traditional safe-haven asset, has become a safe haven for investors, and a large amount of funds have poured in, pushing its price higher. Bob Haberkorn, senior market strategist at RJO Futures, pointed out that the safe-haven buying caused by the uncertainty surrounding Trump's tariff plan is the main catalyst for gold futures to break through $3,100.

In addition to trade factors, the Fed's policy dynamics also have an important impact on the gold market. The Fed kept its benchmark interest rate unchanged last week and hinted that it might cut interest rates later this year. Against this backdrop, investors are paying close attention to the US personal consumption expenditure (PCE) data released on Friday to assess the possibility of further rate cuts. Haberkorn said that if the PCE data is better than expected, it may bring more upside to gold because it will give the Fed more reason to cut interest rates. Gold tends to perform strongly in a low-interest rate environment because it can effectively hedge against economic and political uncertainties.

Judging from market analysis and institutional forecasts, major institutions are generally bullish on gold. Goldman Sachs on Wednesday raised its gold price forecast for the end of 2025 from $3,100 per ounce to $3,300, mainly due to stronger-than-expected ETF inflows and continued central bank demand for gold. ANZ analysts also maintain a bullish view on gold, although they believe that after the recent rapid rise to $3,040 per ounce, some adjustments may occur.

It is worth noting that precious metals such as spot silver, platinum, and palladium also rose with the price of gold, up 1.3%, 0.2%, and 0.9%, respectively. However, despite faster-than-expected U.S. economic growth in the fourth quarter of last year, investors' concerns about Trump's new auto tariffs remain strong. Wells Fargo economists pointed out that although the U.S. economy had certain growth momentum at the beginning of the year, there was uncertainty about the response of companies in the face of trade headwinds. Affected by Trump's economic policies, consumers and businesses are becoming increasingly cautious. Forecasters generally expect U.S. economic growth to slow in 2025, and Federal Reserve officials and Wall Street giants have also lowered their economic growth forecasts.

Overall, the surge in gold prices reflects the market's strong demand for safe-haven assets, and behind it is the uncertainty brought about by the escalation of global trade tensions and the stock market crash. In the future, the market will pay close attention to US economic data and policy dynamics, especially PCE data and further actions of the Federal Reserve, which will largely determine the trend of gold prices. In the current complex economic and political environment, investors need to remain cautious and reasonably allocate assets according to their own risk tolerance and investment goals to cope with potential market fluctuations.