Gold was on track for its eighth weekly gain Friday as buyers sought out the safe-haven asset amid the threat of tariffs and a price disparity between the US and London created incentives to ship more physical kilo bars into New York.
On Friday, gold futures (GC=F) backed off their all-time high from the prior session to hover near $2,950 while the spot, or wholesale reserve price in London, traded at around $2,930 an ounce.
At close: February 21 at 4:59:55 PM EST
Gold is up roughly 11% year to date after hitting its 11th record of 2025 on Thursday.
Much of that price action is attributed to continued central bank buying, geopolitical risks, and uncertainty over US tariffs, including the possibility that even the precious metal wouldn’t be spared from broad-based levies.
Earlier this week, President Trump said he intends to impose levies on autos, semiconductors, and pharmaceutical products. Plans for retaliatory tariffs against countries that charge levies on US goods are also expected in April.
Read more: What are tariffs, and how do they affect you?
Uncertainty over attempts at a peace deal between Ukraine and Russia also put upward pressure on the precious metal.
Meanwhile, a larger-than-normal price difference between gold futures in the US and the wholesale reserve, or spot price in London, has prompted institutional investors to ship elevated amounts of physical gold bars to vaults in New York. Gold inventories for the futures exchange COMEX have spiked since November, reaching their highest level since the pandemic in 2021, according to Bloomberg data.
“I think there’s some fear that if the gold isn’t available for one reason or another, the price is going to explode,” Brett Elliott, director of marketing at American Precious Metals Exchange (APMEX), told Yahoo Finance.
“What they [institutional investors] started doing in response is stockpiling. … When you have conditions like that and you throw in some safe haven demands on top of it, you’re going to see the price of gold start to creep up,” he said.
Read more: How to invest in gold in 4 steps
Central bank demand for gold hit an all-time high last year, with purchases accelerating in the fourth quarter, according to the World Gold Council.
“At the heart of everything, that risk and allocation to gold as a diversifier remains prominent for investors,” said Joe Cavatoni, market strategist at the World Gold Council. “It’s absolutely an essential asset.”
The Federal Reserve’s rate-cutting cycle last year drove prices higher as the non-yielding asset became more attractive to investors. Despite the Fed’s pause on rate cuts and market uncertainty over its next rate decision, Wall Street predicts more gains for the precious metal this year.
