Gold price reached a record high of $2,893.55 per ounce as market volatility and Trump’s trade policies drove US investors to both buy and sell the safe haven investment. The surge comes as American financial institutions rapidly increase their gold purchases due to concerns over potential tariff extensions on raw materials.

Also Read: Trump’s U.S.-Russia Talks: A Crucial Move to Curb De-Dollarization and End the Ukraine War

Understanding the Surge in Gold Prices Amid US Investor Actions and Tariff Impact

Supply Constraints Fuel Price Momentum

The London Bullion Market Association reported over 150 tonnes of gold departing London in January, with approximately 100 tonnes withdrawn from the Bank of England’s vaults. This massive movement has extended gold withdrawal times at Threadneedle Street from days to 4-8 weeks, especially during this period of record high gold price.

“US stockpiles have doubled since Trump won in November. But that 500 tonnes of net inflows contrasts with global mine output of 3,660 tonnes last year, plus ‘scrap’ flows from industry and jewellery of 1,370,” explained Adrian Ash of BullionVault.

British Investors Cash In on Price Surge

BullionVault data shows a 61.5% month-on-month increase in investors selling bars and coins. These increased activities align with the recent gold price record high.

Ash said:

“Shops have been drowning in customers selling back over the past 18 months to take profit as prices jump, whether in the UK, US or even Germany.”

Also Read: Can Bitcoin (BTC) Return to $100K This Week Post-Crash?

Market Forces and Future Projections

Citi recently adjusted its gold forecast upward, predicting prices will reach $3,000 per ounce within three months. Westpac Banking Corp. analyst Richard Franulovich emphasized: “Gold remains in a sweet spot, with little standing in its way. An intrinsically unpredictable and disruptive Trump, hurtling tariff threats at allies and adversaries alike, alongside the threats of 100% tariffs on the BRICs if they diversify away from the dollar, all point to a lift in gold’s safe-haven appeal.” This prediction follows the recent record high of gold prices.

Institutional Moves Shape Market Dynamics

China’s ongoing gold reserve expansion and new pilot program allowing major insurers to invest up to 1% of assets in bullion could introduce an additional 200 billion yuan ($27.4 billion) to the market. The Royal Mint reported a 45% increase in gold sales, indicating clear impacts of the gold price reaching such a record high.

Stuart O’Reilly said that:

“many precious metals manufacturers and wholesalers who operate on relatively low margins lease their inventories to help mitigate the impact of fluctuations in the spot price.”

Also Read: Metaplanet’s Bitcoin Pivot Propels Stock to 3,600% Surge in 12 Months