Trading Update 8th June 2025

Gold Outlook: Safe-Haven Demand Grows as Global Risks Escalate

Over the past week, spot gold oscillated between $3,326 and $3,350 per ounce, finishing up around 1%. Traders sought safety amid escalating trade tensions and a softer US dollar.

Despite gains in equity markets, gold held its ground. Mid‑week saw higher COMEX futures volumes, signalling renewed investor interest. By week‑end, fresh political concerns kept gold buoyant, nudging prices slightly higher.

Gold’s resilience reflected persistent geopolitical unease. As central banks continued buying, prices found support even when stock rallies tested safe‑haven demand.

Global Politics and Safe‑Haven Demand

Tariffs and Trade Tensions

On 2 June, the US threatened to double tariffs on steel and aluminium to 50%. Europe reacted cautiously as markets jittered. These threats spooked currency traders, pushing investors toward gold.

The weaker dollar made gold more affordable overseas. This boosted international buying and underpinned prices throughout the week.

Ongoing Conflicts

Conflicts in Ukraine and the Middle East kept safe‑haven flows strong. Renewed clashes and rising rhetoric between major powers added further fuel to gold’s appeal.

Heightened global risk drove investors to rebalance portfolios, with gold featuring prominently as a hedge.

Central Bank Purchases

Countries like China, India and several oil exporters ramped up gold buying to diversify reserves. This trend gained momentum amid talk of reducing reliance on the US dollar.

Domestic demand also rose. In Iran, where inflation topped 30%, citizens turned to gold, driving local buying pressure and supporting prices.

Economic Policies Shaping Markets

US Federal Reserve

Strong US jobs data pushed Treasury yields higher, yet Fed Chair Powell warned that tariffs could stoke inflation. Markets interpreted this as a signal for rate cuts later in the year.

Comments from Fed officials maintained expectations of lower borrowing costs, reinforcing gold’s low‑rate allure.

Diverging Global Stance

The European Central Bank cut rates but struck a cautious tone. In India, the Reserve Bank slashed its repo rate by 50 basis points to 5.50%, one of its steepest cuts.

This divergence shaped bond markets and the US dollar, indirectly supporting gold’s attractiveness.

Stocks and Portfolio Impacts

Equity markets held near record highs, driven by growth optimism in Europe and stimulus measures in India. Yet spiking yields prompted profit‑taking in tech stocks.

This rotation into safe havens highlighted underlying fragility. Gold benefited as traders sought balance amid mixed signals from global equities.

Analyst Warnings and Downside Risks

Some firms predict a gold pullback. Quant estimates suggest a 12–15% drop in the next two months. Morningstar forecasts an even steeper slide over coming years.

Anticipated Fed tightening, easing trade tensions and conflict de‑escalation could pressure prices. Still, many strategists view gold as a vital hedge against longer‑term uncertainties.

Major banks like J.P. Morgan, Goldman Sachs and UBS remain broadly bullish into 2026, citing continued central bank buying and geopolitical risks.

Key Takeaways for Spread‑Bet Traders

• Spot gold rose ~1% early in the week, ending above $3,330/oz.
• Geopolitics drove safe‑haven flows amid tariff threats and conflicts.
• Yield shifts and central bank actions underpinned demand.
• Equities remained firm, but risk sentiment felt fragile.
• Analyst views diverge; short‑term profit‑taking possible, yet long‑term support stays intact.

For spread‑bet traders, macro events such as Fed minutes, US inflation data and evolving trade policies provided clear triggers. Monitoring central bank moves—especially in India and the Eurozone—remains crucial. Employ tight risk controls and dynamic exposure to navigate volatility effectively.

Outlook and What’s Next

Looking ahead, market focus shifts to:

• US inflation figures and PCE data, which will guide Fed policy.
• Trade negotiations between the US, China and EU.
• Geopolitical hotspots in Ukraine, the Middle East and Asia.
• Central bank actions, including rate decisions and gold reserve purchases.

If uncertainty persists, expect gold to stay favoured. A robust global growth rebound or Fed tightening could temper prices, yet gold’s role as a hedge against inflation often preserves its value.

Gold’s performance from 1 to 8 June underscored its safe‑haven status amid trade fears and policy divergence. While short‑term corrections may occur, the broader backdrop suggests ongoing support for gold in a complex and evolving global landscape.

Check out the up-to-date and historic gold prices here.