Gold price rises: Is this a good time to buy?

Gold prices hit a record high on Friday, January 31, set for their best month since March 2024, as investors flocked to the safe-haven metal due to heightened US tariff concerns, while awaiting a key inflation report due later in the day for further direction.

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Spot gold was steady at $2,793.84 per ounce, by 0535 GMT, gaining more than 6 per cent this month. Earlier in the day, prices hit an all-time high of $2,799.71.

US gold futures rose 0.1 per cent to $2,824.40.

Trading was thin as Chinese markets were closed for the Lunar New Year holidays.

Trump’s tariff

US President Donald Trump said on Thursday, January 30, the United States would impose a 25 per cent tariff on imports from Mexico and Canada, repeating his warning to the two countries.

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“Repeated tariff threats have fuelled safe-haven flows into gold… any downside surprise in the inflation reading could suggest greater policy flexibility for the Fed, potentially bringing forward rate-cut expectations and providing further support for gold,” IG market strategist Yeap Jun Rong said.

The December US personal consumption expenditures (PCE) report, due at 1330 GMT, will be scanned for further clues on interest rate trajectory. On Wednesday, Fed Chair Jerome Powell said inflation and jobs data would determine when another easing would come.

Gold: A safe investment during geopolitical turmoil

Gold is considered a safe investment during geopolitical turmoil and thrives in a low interest rate environment.

Read: Gold prices soar to 11-week high amid Trump jitters, dollar dip

“We reiterate that long gold remains our highest conviction trading recommendation across commodities, driven by structural (central bank buying) and cyclical (Exchange Traded Funds buying) factors,” Goldman Sachs said.

Further gains could be in store for gold if tariff threats move from being a bargaining concept to an economic reality, said Tim Waterer, chief market analyst at KCM Trade, adding that prices could move north of $2,800 levels.

Silver and platinum were poised for weekly gains as well.