Today market analysis on behalf of Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A
5th February 2025
Gold’s momentum continued today, reaching unprecedented heights as investors flocked to safe-haven assets amid escalating concerns over US-China trade tensions and their potential impact on global economic growth. While President Trump delayed tariffs on Mexico and Canada, he moved forward with implementing a 10% levy on Chinese imports, prompting Beijing to announce retaliatory measures. Adding to market uncertainty, Trump’s statement about being in no hurry to engage with Chinese President Xi Jinping, coupled with his suggestion regarding US control of the Gaza Strip reconstruction, further intensified the demand for safe-haven assets like gold.
The precious metal’s upward trajectory has been additionally supported by weaker economic indicators from the United States, strengthening the case for another Federal Reserve rate cut. Market participants are closely monitoring today’s US Purchasing Managers Index (PMI) data, as softer figures could provide additional momentum for gold prices. The upcoming Non-Farm Payroll (NFP) report on Friday remains a focal point for market observers.
At the same time, central banks have maintained their substantial gold acquisitions, with purchases exceeding 1,000 tonnes for the third consecutive year and showing particular acceleration in the fourth quarter of 2024. This suggests continued support for the precious metal in 2025. With central banks maintaining their dominant position and under current conditions, the market could test the $3,000 threshold.
