In a remarkable turn of events, gold prices have reached unprecedented heights, marking a significant moment in the investment worldOn February 11, gold soared more than 1%, reaching an all-time high of $2,941.85 per ounce in the spot market, while COMEX gold also surged over 1% to hit $2,965.30 per ounceThe A-share market in China saw a similar response, with gold-related stocks rising sharply as investors flocked to this traditional safe-haven asset.

This year, gold has established itself as a top performer, boasting an impressive cumulative growth rate exceeding 10% since the start of 2023. Notably, it has achieved a strong start for the third consecutive year, confirming its status as a reliable asset amidst economic uncertainty.

The recent surge in gold prices has prompted a wave of new investors to open gold trading accountsIn response to the burgeoning market activity, the Shanghai Gold Exchange issued a cautionary statement highlighting an increase in uncertainty factors that may impact market operation, urging member units to prepare risk response measures to maintain market stability and reminding investors to exercise caution in risk management.

The triggers for gold's upward momentum are deeply entwined with global economic developmentsFollowing the U.SPresident's announcement on February 10 regarding the imposition of a 25% tariff on steel and aluminum products, gold prices spiked, breaking through the $2,900 barrierAs of February 11 at 10:20 AM, spot gold continued to climb, crossing the $2,940 threshold.

Richard Franulovich, an analyst at Westpac Bank, emphasized the unpredictability of the U.S

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President's policies, which have injected a sense of chaos into both allies and adversaries through tariff threatsThis uncertainty has significantly heightened gold's appeal as a safe havenThe threats indicate a marked increase in risks and uncertainties facing the global financial markets, thereby fostering a heightened demand for safety among investors.

Analyst Wang Yanqing from CITIC Futures also elaborated on the destabilizing effects of the U.SPresident’s tariff policies on the marketThe unpredictability surrounding the scale and scope of these tariff implementations has created substantial market apprehensionAdditionally, concerns regarding potential taxes on gold imports have led to an uptick in physical demand, pushing gold prices higher.

Wang further pointed out that the evolving tariff policies pose challenges for the Federal Reserve, necessitating a careful assessment of potential inflation sources—be it economic overheating or tariffsThis has led to a more prudent stance from Federal Reserve officials, especially as U.S. economic indicators present a mixed pictureWith manufacturing and service sector performance diverging and non-farm employment figures reflecting variability, the markets are reacting cautiously.

The fluctuations in U.S. policies have led to a noticeable reallocation of funds towards gold marketsAfter a period of reduced holdings, the world's largest gold ETF, SPDR, sharply increased its positions by 4.31 tons last Friday, bringing total holdings up to 868.5 tons, underscoring a renewed investor interest in the precious metal.

Major financial institutions project that gold could surpass $3,000 per ounce later this year

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Citigroup recently predicted that further tariff escalations might drive gold prices to reach $3,000 in the next six to twelve months, while concurrently, silver prices may rise to $36 per ounceJPMorgan also indicated a continuation of upward trends in gold prices and projected that the disparity between gold and other precious metals such as silver, platinum, and palladium will continue to widen.

Goldman Sachs highlighted that trade tariffs and the U.S. debt crisis are primary risk factors propelling gold prices higher, contending that gold’s price trajectory is influenced by both structural factors—such as central bank purchases—and cyclical factors like ETF investmentsTheir analysis suggests that gold could hit $3,000 per ounce by the second quarter of 2026.

China International Capital Corporation (CICC) anticipates that gold prices may remain within a bull market channel, with the potential to breach $3,000 per ounce by 2025, especially considering that gold prices in RMB may surge more significantly compared to prices in U.S. dollars.

Wang Kai, the chief strategist at Guosen Securities, posited that the rationale behind the rising gold prices stems from a global scarcity of safe-haven assetsThe frequency of risk events has underscored the demand for security and a shift towards safety assetsThe recent intensification of uncertainty surrounding geopolitical tensions and global economic conditions has amplified the market's appetite for secure investments.

In light of these trends, numerous commercial banks have begun adjusting their investment parameters within gold accumulation businesses to better caution and guide investors against reckless decisions that could lead to financial losses

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