Market Analysis by Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS
March 14, 2025 –
“Gold has reached a new historic record, reaching $2,985 per ounce on March 13, 2025. This increase has been driven by various economic and geopolitical factors, highlighting the moderation of inflation in the United States and strengthening expectations of interest rate cuts. Investors have reacted to the slowdown in the Consumer Price Index, which rose by 0.2% in February and 2.8% annually, figures lower than expected.
The possibility of the Federal Reserve implementing three interest rate cuts during 2025 has generated a greater demand for gold as a safe-haven asset. The first cut is expected to occur in June, which would contribute to a more favorable liquidity environment for precious metals. Investors have increased their positions in gold, considering the volatility in financial markets and the weakness of the U.S. dollar.
Another key factor in gold’s surge has been the growing uncertainty surrounding U.S. trade policy. President Donald Trump’s threats to impose new tariffs on the European Union have raised concerns in international markets. These measures add to the 25% tariffs on steel and aluminum, which have provoked trade retaliations from Canada and other affected economies.
Additionally, fears of a possible recession in the United States have boosted the demand for safe-haven assets such as gold. The trade war and economic instability have created uncertainty, leading investors to seek refuge in precious metals. Signs of a slowdown in U.S. economic growth have strengthened the perception that the Federal Reserve might intervene with more expansive measures.
The U.S. dollar has also played a key role in gold’s rise, as it has remained near its lowest levels in the past four months. The dollar’s weakness makes gold more attractive to international investors, driving demand and the precious metal’s price. A weaker dollar is usually associated with a higher valuation of safe-haven assets such as gold and silver.
In this context, analysts predict that gold could maintain its upward trend in the coming months, depending on the evolution of the Federal Reserve’s monetary policy and the global geopolitical situation. If economic uncertainty persists and interest rate cuts materialize, it is possible that gold will continue breaking new records.
In conclusion, the rise of gold to a historic high is closely linked to macroeconomic and political factors. The moderation of inflation, expectations of interest rate cuts, trade tensions, and the weakness of the dollar have created a favorable environment for the growth of the precious metal. In the coming months, gold’s performance will depend on the evolution of these factors and the financial markets’ response to global challenges.”
Analysis by Antonio Di Giacomo, Financial Markets Analyst for LATAM at XS