Market comment on behalf of Ruben Ferreira – Head of Portuguese Operations at FlowCommunity
1st February 2025,
Gold prices have stabilized after hitting all-time highs, driven by heightened demand for safe-haven assets amid political uncertainty. U.S. President Donald Trump’s repeated tariff threats fueled the rally, compounded by disappointing Q4 GDP data.
The outlook for gold remains positive, with several major central banks, including the European Central Bank, the Bank of Canada, and the Swedish Riksbank, having implemented rate cuts, enhancing gold’s appeal. Although the Federal Reserve decided to keep rates unchanged, traders anticipate two rate cuts this year which could support gold.
Looking forward, ongoing trade tensions may continue to bolster demand for gold. Should tariffs on Mexico and Canada materialize, gold could see more inflows and new record highs. However, a rollback in tariff threats might weaken gold’s momentum. Additionally, upcoming key economic releases including ISM PMIs, Nonfarm Payrolls and Core PCE could also inject volatility into the market.