Gold Hits New Record Highs as Swiss Cut Rates, Fed and BoE Hold
Thursday, 3/20/2025 16:12
The PRICE of GOLD hit a new all-time high against most currencies including the US Dollar and 'safe haven' Swiss Franc on Thursday, as a raft of major central-bank decisions named uncertainty, inflation and the risk of economic recession as prime concerns.
Bullion for Euro and UK investors remained below
last month's record EUR and GBP gold price highs, however, trading over 1.5% shy at €2804 and £2345 per Troy ounce respectively after the Bank of England kept its key interest rate on hold at 4.5%, caught between "weakness in growth" and a "projected rise" in UK inflation.
Also citing
"elevated" inflation – and pointing to President Trump's US import tariffs – the Federal Reserve held Dollar interest rates unchanged at 4.33% as expected on Wednesday, but said it will slow the pace of its QT bond selling, helping nudge US Treasury debt prices higher and pulling down Washington's longer-term borrowing costs.
In contrast, "the outlook for inflation in Switzerland [is] predominantly to the downside," said Martin Schlegel, chairman of the governing board of the Swiss National Bank on Thursday as the SNB cut its overnight interest rate to just 0.25% per annum.
That's the lowest return offered to commercial bank deposits since Switzerland's central bank ended its 7-year run of negative interest rates in 2022.
Gold in London – heart of the precious metal's global trading and storage network – today hit fresh all-time highs in Swiss Francs as well as in US, Canadian and Australian Dollars, while edging back from yesterday's new peak in terms of the Japanese Yen.
Retail gold prices in No.2 consumer nation set new record highs above ₹91,000 per 10 grams, and Shanghai gold prices also hit a new all-time high, the 5th in 5 days, rising to ¥709 per gram for wholesalers in China, the precious metal's No.1 mining, importing and consumer nation.
That's over 40% higher than China's kilobar gold price this time last year, when a surge in Chinese consumer and private-investor demand then
already 6 months old finally
began to make headlines.
Keeping its short-term interest rate unchanged this morning, the People's Bank of China made more short-term loans to the country's banking sector, taking this week's injections so far above the equivalent of $136 billion.
"The gold price is being driven by uncertain market situations, geopolitical tensions, a weaker US Dollar and the expectation that interest rates will [eventually] be cut," says a note from Belgium precious-metals refining and technology group Umicore.
But the US Dollar rose again Thursday, rallying 0.9% from Tuesday's 5-month low on its DXY index against the Western world's other major currencies following the Fed's 'no change' decision.
"Uncertainty remains the watchword and is the primary driver behind the flight to safety [into] gold," says Rhona O'Connell, head of market analysis for global brokerage StoneX.
"Silver [is] underperforming due to its industrial nature (over 60% of demand)...coloured by Trump’s anti-green stance given that solar is one of the key elements in silver’s otherwise bright longer-term prospects."
With USD gold hitting $3057 per Troy ounce in Asian trade overnight, the price of silver today dropped almost 90 cents from $34 per ounce, pulling more than 5.0% below last October's 12-year high.
"Generally speaking," says former HSBC fund manager and now
Bitcoin-gold advocate Charlie Morris, "when the gold market is red hot, expect the price of silver and the miners to go wild.
"That hasn’t yet happened, which suggests we are not close to a [gold] market peak. This is a slow and steady bull market and not a euphoric move."
"Platinum and palladium [are] also struggling in the face of economic issues," says O'Connell at StoneX, "while the near-inevitable pushback on net zero / EV targets [following Trump's return to the White House] is gaining momentum."
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