Gold Hovers Near Record on Trade Fears and Fed Pressure
Last week gold briefly touched $3,500 per ounce, setting a new record in both nominal and inflation-adjusted terms. StoneX Head of Market Analysis (EMEA & Asia) Rhona O’Connell unpacks how we got here and what could come next.
Gold’s inflation-adjusted 1980 high was finally eclipsed at $3,486, confirming a new record
Trade-war uncertainty, geopolitical flashpoints and concern over central-bank independence created a crowded rush into safe-haven assets
Further gains toward $4,000 would stem from escalating global crises rather than healthy fundamentals
A Milestone Inflated High
O’Connell notes that the prior real-terms peak dated to January 1980, equivalent today to “$3,486 … that wasn’t ever taken out until a week ago last Monday”. Crossing that level signalled an historic moment for the metal after decades of lower real prices.
Geopolitics and Monetary Policy Drive Demand
Trade-war headlines and political pressure on the Federal Reserve have fed investor anxiety. “If you get political influence on any central bank… it would be positive for gold and it wouldn’t be good for the global economy”. With unresolved armed conflicts, safe-haven demand remains strong, although much of the risk may already be reflected in price.
Physical Flows and COMEX Dynamics
Fears that tariffs might snare bullion saw an extraordinary build-up of metal inside COMEX-approved vaults near New York. Stocks swelled from roughly 500 t to a peak of 1,402 t, “about 94 % of open interest”, before beginning to ebb as clarity returned.
What Could Push Gold Higher—or Lower
Gold is “a very crowded space at the moment”. O’Connell argues that most known macro and geopolitical risks are priced in. A sustainable move to $4,000 “is going to be for bad reasons”, implying deeper conflict or policy error. Conversely, genuine progress on trade or peace fronts could ease demand and allow prices to consolidate below recent highs.
Gold’s Outlook
O’Connell believes that the question of whether gold will reach or exceed $3,500 hinges on a mix of geopolitical tensions, central bank policies, and shifting economic conditions. She notes that while nobody in the precious metals community can predict the future with complete confidence, while the current interplay of heightened uncertainty and logistical hurdles makes gold a focal point for investors seeking stability. If uncertainty persists, she suspects gold prices will continue their upward climb.
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