Gold hits all-time high, with global tensions set | Australian Markets

A confluence of international financial ructions, together with an rising tariff battle, have pushed gold costs to an all-time-high document, new figures from the World Gold Council (WGC) reveal.

Gold hit US$2,812/oz (AU$4,485/oz) on the finish of January 2025, up eight per cent on the earlier month, pushed by a confluence of components which have inspired the uptake of ‘safe haven’ property, together with growing geopolitical risk, a weaker US greenback, falling bond yields, and issues over rising protectionist financial coverage worldwide, pushed by the Trump administration’s ongoing tariff threats.

All-time-high costs had been logged in all main trading currencies, together with an 8.9% soar in British Pound and Canadian Greenback, and a 7.8% and seven.6% increase in USD and Euro costs, respectively.

Gold trading volumes averaged US$264 billion per day throughout international markets in January, 20% greater than the earlier month.

International gold ETFs noticed a US$2.6 billion (30 tonnes) gain in property underneath management (AUM), propelled by a surge in inflows to European gold funds (up by US$3.4 billion, or 39 tonnes) – a vital turnaround from 2024, the place the area led international outflows.

Inside Europe, the UK and Germany dominated inflows. Within the UK’s case, a fall in bond yields within the second half of 2024, in anticipation of an upcoming charge cut from the BoE this yr, drove gold ETFs greater. In Germany, and equally in France, political uncertainty, weakening growth prospects, and bellicose US trade insurance policies have inspired traders’ uptake of gold shares.

Extra modest positive aspects had been recorded for Asian funds (up US$320 million, or 4 tonnes), pushed by curiosity from India slightly than China, and different international funds.

These positive aspects had been partially offset by a US$500 million (six tonne) loss for US funds, which is presently grappling with the uncertainty of a Trump administration. Certainly, within the first week following his inauguration on 20 January, because the WGC notes, traders moved to seize earnings from a surging gold price, initiating an early sell-off.

As properly, whereas a weaker US greenback just isn’t a consensus view, elevated downward stress on the currency might drive additional assist for gold.

A “rattled equity market”, nonetheless – noting the latest tech stock selloff triggered by the doorway of a Chinese language-developed AI model into what has been an American-dominated AI market – might lure traders back to protected haven gold holdings.

By the tip of January, the worldwide AUM reached US$294 billion, one other month-end document, and collective holdings continued to rebound (up 34 tonnes to a complete of 3,523 tonnes).

Wanting forward, a weakening US greenback might show a additional boon for gold asset holders, contemplating their inverse relationship. With elections in Germany triggering a sustained strengthening of Euro versus USD, and the persevering with strengthening of the Japanese Yen, the WGC suggests elevated assist for gold’s incumbent power.