Gold is approaching all-time highs again as investors return to the ‘save-haven’ asset due to fears of persistent inflation and US tariffs.
An ounce of the precious metal is going for $2,775 as of 30 January, just a few ticks below the $2,790 record hit last October.
The geopolitical troubles including the Russia-Ukraine war and Middle East turmoil that helped propel gold hire last year remain unresolved, while markets have been further destabilised by China’s aggressive progress in AI via DeepSeek.
Last night (29 January) the Federal Reserve dropped its claim that inflation is progressing towards the 2% target, reflecting the fact it has been stuck nearer to 3%.
Added to all this, there have been reports that other central banks have been acquiring more gold.
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Susannah Streeter, head of money and markets, Hargreaves Lansdown said: ‘’Gold is shining as a ‘safe haven’ asset, with investors seeking shelter to weather the storm of unpredictability.
“With US President Donald Trump still dangling the threat of tariffs over near neighbours and far foes, there are concerns that they could push up US consumer prices, increase inflation, and lead to interest rates staying higher for longer.
“The Federal Reserve has nodded to these concerns, with a note of caution emanating from the bank after the decision to keep interest rates on hold.
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“Gold is seen as a hedge against inflation, and a safer refuge amid volatility,” she continued. “The gyrations on stock markets, caused by progress made by Chinese AI rival DeepSeek, which has potentially threatened the dominance of Silicon Valley, may also have helped gold’s glittering run upwards this week.”
Streeter cautioned that investors should be wary though, as investing in gold is far from a one-way bet. It should not typically be more than a small part of portfolios.
While it has often risen in times of economic or political crisis, it has also a history of losing its lustre, she explained. After rising in the ‘70s and early ‘80s, it fell and took 23 years to get back to its 1983 high.
Rick Kanda, managing director at The Gold Bullion Company, added: “Global central banks are expected to maintain their gold buying momentum, which will be key to gold hitting that $3,000 value mark. As we move into the new year, I predict that gold will continue to see significant increases, especially if economic instability continues.
“Another factor potentially making gold a lucrative commodity to invest in is geopolitical tensions and any monetary policy changes as throughout these changes, it’s likely gold will continue to retain its worth during uncertain times.”
