Gold prices surged above $3,200 per ounce for the first time on Friday, driven by escalating trade tensions between the U.S. and China, prompting investors to seek safety in the precious metal. The price of spot gold soared to a record $3,245.28 per ounce, marking a sharp increase of around 23% since the beginning of the year. Factors contributing to this surge include geopolitical uncertainties, central bank demand, and a rise in investments in gold-backed exchange-traded funds.

Nitesh Shah, a commodities strategist at WisdomTree, noted the rapid increase in gold prices, stating that it took over a year for gold to jump from $2,000 to $3,000 per ounce and that surpassing $4,000 per ounce no longer seems implausible. The U.S.-China trade tensions, with President Donald Trump imposing high tariffs on Chinese imports, further fueled the demand for gold as a safe-haven asset. Increased inflows of 226.5 metric tons worth $21.1 billion into gold ETFs in the first quarter indicate growing investor interest in gold amidst economic uncertainties.

Furthermore, factors such as global economic tensions, the risk of stagflation, a weaker dollar, and a drop in the dollar value have bolstered the appeal of gold as an investment option. Gold prices also benefitted from a weakened dollar, which reached a three-year low, attracting investors holding other currencies.

Gold's strong performance in recent years has been attributed to turmoil in the Middle East and Europe, as well as uncertainties surrounding White House policies. The metal saw its largest quarterly rise since September 1986 in the first quarter of 2025, reaching 23 all-time highs, with 11 surpassing the $3,000 mark. Analysts predict that expectations of U.S. Federal Reserve rate cuts will continue to support the upward trend in gold prices.