For the first time in history, spot gold briefly surpassed the $3,000 per ounce mark, driven by strong ETF inflows, geopolitical tensions, and economic uncertainty. However, the rally cooled slightly, with prices settling at $2,990.
Gold futures for the April delivery also surged past the $3,000 milestone on Thursday, marking a significant milestone in the precious metals market.
What’s Fueling Gold’s Surge?
The 15% year-to-date increase in gold prices has been attributed to several key factors:
- Strong ETF Demand: Investors have poured $10 billion into gold ETFs over the past 30 days, reflecting a growing appetite for safe-haven assets.
- Geopolitical Uncertainty: Rising global tensions and economic instability have pushed investors toward gold as a hedge.
- U.S. Market Concerns: Tariff discussions by former President Donald Trump have created uncertainty in U.S. equities, further boosting gold’s appeal.
Gold’s Performance Against Other Assets
Despite the historic rally, gold priced in British pounds remains below its all-time high of £2,363, currently trailing by approximately £300.
Meanwhile, bitcoin and gold ETFs have shown a divergence. Gold ETFs saw inflows of $10 billion, while Bitcoin ETFs lost $5 billion in the last month.
Charlie Morris, founder of ByTree and manager of the BOLD ETF, which holds both gold and Bitcoin, expects this trend to reverse soon.
“Sooner or later, the flows will reverse again—just as they always do,” Morris stated, predicting a potential shift back into bitcoin.
Is More Upside Ahead for Gold?
As global economic uncertainty lingers and investors continue seeking safe-haven assets, gold’s momentum could remain strong. However, potential profit-taking and shifts in ETF flows may lead to short-term volatility.
With gold now trading near record levels, the next moves in investor sentiment, interest rates, and global economic policy will be key factors in determining whether gold can sustain its rally or retrace from these historic highs.
