Gold Reaches a Fresh High Above $2,800 as Stocks Post Weekly Gains
Last week gold notched its fourth consecutive weekly gain, fueled uncertainty surrounding President Trump’s tariff policies and continued geopolitical strife. This week, markets were driven by speculation surrounding the newly elected President’s economic policies, along with investor sentiment about the Fed’s next move on the interest rate front.
Over the weekend, news surfaced of a newly launched Chinese AI platform, DeePseek. The news rattled Wall Street, as shares of AI darling Nvidia tumbled by 17%. As a result, the tech-heavy Nasdaq Composite shed 3% and the S&P 500 gave up 1.5%. Elsewhere, gold retreated from a multi-month high, amid a dollar uptick and profit taking. By the end of Monday’s trading, gold was 0.6% lower at $2,740, while silver was little changed at $30.06.
On Tuesday, equities recovered from the previous session’s tech rout. Major averages followed tech shares such as Nvidia and Meta higher. Gold and silver also rebounded during Tuesday’s trading with 0.8% and 1% respective gains.
On Wednesday, gold encountered headwinds, following a press conference from Federal Reserve Chair Jerome Powell, where he announced that interest rates would remain unchanged at 4.25%-4.50%. During his address, Powell struck a more cautious tone as it pertains to future rate cuts, citing sticky inflation.
Following Powell’s press conference, the dollar index rose by 0.3%, making gold more expensive for foreign currency holders. Gold encountered additional headwinds in rising yields, which dented the appeal of non-yielding bullion. However, losses for gold and silver were limited as the pair ended Wednesday’s trading modestly lower at $2,762 and $30.45, respectively.
Gold reversed course on Thursday, fueled by a weaker-than-expected fourth quarter GDP print, and continued doubt over potential tariffs on Canada, Mexico, and China, which are set to be levied on Saturday. As a result, gold reached a fresh all-time high on Thursday, of $2,798. In a similar move, silver surged by nearly 2% to a closing price of $31.43.
Gold extended gains this morning, touching a new high of $2,815, putting the metal on course for its best month since March of last year. The yellow metal corrected slightly but secured a 1.5% weekly gain at $2,799. On a percentage basis, silver outperformed gold this week, with a 3.6% weekly uptick, at $31.33 an ounce.
Stocks tumbled this afternoon, following confirmation from the White House that tariffs against Canada and Mexico will indeed begin over the weekend, along with a 10% duty on Chinese goods. Most notably, the Dow Jones Industrial Average sunk by 0.75% as shares of Chevron tumbled.
Despite today’s downturn, major averages ended the week in the green. Gains were led by the Nasdaq and S&P 500 with 2.06% and 1.21% weekly upticks. Meanwhile, the S&P trailed other major averages with a modest 0.90% weekly gain.