Gold won the top safe-haven spot on Friday, zooming past a record $3,200 per ounce to hit a new record, while bonds and the dollar slid.
Gold (GC=F) futures hit an all-time session high of $2,263. The precious metal posted its best five-day performance since 2020 to cap a chaotic week on Wall Street against the backdrop of an escalating trade war between China and the US.
On Friday, China said it will raise duties on imports of US goods to 125%. The move was in direct response to the Trump administration raising its reciprocal tariffs on China to 145% this week while duties on other countries were paused for 90 days.
As of 4:57:31 PM EDT. Market Open.
“The new highs in gold are signaling a shift in appetite for US assets,” said Ryan McIntyre, senior managing partner at asset manager firm Sprott. “Confidence in the US has clearly been shaken so people are looking to diversify.”
The reaction in the long-dated bond market, typically seen as a safe haven, spooked investors this week as Treasurys have been selling off. On Friday, the 10-year yield (^TNX) surged to its highest level since February. Bond prices and yields are inversely correlated.
“Usually, gold would need to consolidate at new lows before fresh buyers emerge to take advantage of lower prices … but investors were desperate to find a safe haven amongst the market carnage, particularly after the flight into US Treasuries, the traditional ‘flight to quality’ trade, went so spectacularly wrong,” said David Morrison, senior market analyst at Trade Nation.
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Amid the market chaos this week, the dollar (DX=F) index has also come under pressure, breaking below the psychological 100 level on Friday.
Gold futures are up roughly 24% year to date, making numerous all-time highs along the way as tariff uncertainty raised recession or stagflation fears and increased the expectation that the Federal Reserve will need to step in with rate cuts this year.
“Firstly, policy continues to be made in an utterly random and incoherent nature,” Michael Brown, senior research strategist at Pepperstone, wrote in a note early on Thursday morning.
“This continued incoherence, I guess, should also help keep the bull case for gold relatively solid, too,” he added.
Gold’s rally comes as central banks’ demand hit all-time highs last year and as investors increased inflows into physical gold-backed exchange-traded funds (ETFs).
Ines Ferre is a Senior Business Reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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