Global gold prices rose significantly late on Friday, with the yellow metal reaching $2,880 per ounce, up 0.84%. At the same time, gold futures hit a record high of $2,900. This rise came after US employment data showed a decline in the unemployment rate, despite the US economy not achieving its target numbers in job creation. The market now expects the Federal Reserve to cut interest rates in May, after it was believed that it would be cut in June.
Gold witnesses a strong rise in Asia and Europe
In Asian and European trading on Friday, gold prices witnessed a significant rise. Prices were affected by a state of uncertainty that prevailed in the markets, before the release of the main US non-farm employment data. The trade war between the United States and China emerged as a major catalyst for increasing demand for gold as a safe haven. In addition, the weakness of the dollar helped boost demand for the yellow metal, which is considered a safe asset during times of crisis.
Middle East Tensions Contribute to Higher Prices
In addition to the trade war, tensions in the Middle East have boosted demand for gold. Following US President Donald Trump’s statements regarding the seizure of the Gaza Strip, financial markets have witnessed increasing pressure. This escalation has prompted more investors to seek safe assets. At that moment, gold prices in spot transactions rose by 0.2% to $2,862.67 per ounce. Gold futures also rose by 0.3% to $2,884.81 per ounce.
Gold Futures
Continuing the recent rises, analysts from Citibank and UBS have raised their gold price forecasts for 2025. Citibank believes that gold may reach $3,000 per ounce in the short term. While UBS expects gold to reach this price by the end of 2025.
Gold and the stability of the dollar
Spot gold prices remain close to record highs, with the metal reaching $2,882.35 per ounce. This was supported by a weaker dollar. With the dollar steady on Friday, the focus shifted to the non-farm payrolls data, which was expected to be strong. The data suggests that the US labor market remains resilient, giving the Federal Reserve less incentive to cut interest rates.
The US Federal Reserve and Gold
Recently, the US central bank indicated that it does not plan to cut interest rates quickly. This statement came amid uncertainty over inflation and US trade policies. However, higher interest rates in the long term could have negative effects on the outlook for gold, especially if the US labor market continues to strengthen. If this happens, gold could face significant challenges in maintaining high prices.
Other Precious Metals Rise
Gold was not the only one to see gains, as other precious metals also rose in the markets. Platinum settled at $1,021.65 per ounce, while silver saw a slight increase to $32.678 per ounce. These increases came amid rising demand for precious metals, as a result of current economic and geopolitical conditions. Despite the divergence in the price movements of these metals, they all benefited from the general weakness in the dollar.
China seeks to reduce the economic impact of the trade war with the United States, especially in light of the slowdown in economic growth. Recent economic readings in China have shown the need to take more stimulus measures. These expectations will continue to affect copper prices, as the market is witnessing a readiness for further trade escalation.
Gold and yellow metal prices are witnessing an unprecedented rise in global markets, thanks to the complex economic and geopolitical factors that the markets are going through. Despite the economic challenges.
Copper prices rise amid Chinese stimulus bets
Copper prices have seen a significant rise in global markets recently. Investors are anticipating more economic stimulus in China, world’s largest importer of industrial metals. With growing expectations that the Chinese government will take stimulus measures to offset the effects of the trade war with the United States, the market has begun to monitor these movements.
Copper prices were affected by these expectations, as the price of copper on the London Metal Exchange rose by 1.1%, reaching $9,389.85 per ton. Copper futures in March also recorded a 0.6% increase, reaching $4.4875 per pound. This rise reflects the market’s desire to adapt to any potential stimulus decisions by Chinese government.
Despite the trade sanctions imposed by the United States, analysts expect China to continue providing economic incentives to accelerate its growth. Concerns are growing about slowing growth in China, which reinforces need for more stimulus measures in the coming period. Experts believe that this stimulus will increase demand for copper and other industrial metals, which will push prices higher. On the other hand, analysts point out that the trade war between China and the United States may affect the stability of metal markets in general. However, outlook for copper remains positive in light of the continued expectations of increased demand for industrial metals.
Trade War and its Impact on Copper
It was not only domestic economic factors that were influential, but the trade war between the United States and China played a major role in stimulating the copper markets. After US President Donald Trump imposed a 10% tariff on all Chinese imports, Beijing took retaliatory measures. JP Morgan analysts expect that Trump may raise the tariffs to 60% on China in the future. However, China is expected to focus on implementing stimulus measures to help the economy adapt to these challenges.
