Gold prices surged to an all-time high on Tuesday as investors sought refuge in the precious metal, driven by concerns that U.S. President Donald Trump’s proposed reciprocal tariffs could escalate inflation and slow economic growth.
Spot gold climbed 0.6% to $3,142.83 per ounce as of 0310 GMT, after reaching a record peak of $3,145.38 earlier in the session. Meanwhile, U.S. gold futures advanced 0.7% to $3,171.80.
This rally follows bullion’s strongest quarterly performance since 1986, marking one of the most significant price surges in gold’s history.
Safe-Haven Demand Increases Amid Economic Uncertainty
Market analysts attribute the price spike to growing uncertainty ahead of Trump’s April 2 announcement of sweeping reciprocal tariffs, a policy designed to counter perceived unfair global trade practices.
“The anticipation of these tariffs has led investors to adopt a defensive strategy, shifting towards safe-haven assets like gold to hedge against potential market volatility,” said IG market strategist Yeap Jun Rong.
While some technical indicators suggest gold may be overbought in the short term, Yeap noted that ongoing uncertainty is likely to keep demand strong, with investors eyeing a potential test of the $3,200 level.
Adding to market concerns, tariffs on automobiles are scheduled to take effect on April 3, prompting further speculation about economic disruptions.
Interest Rate Outlook and Economic Data
Gold, often seen as a hedge against inflation and economic instability, thrives in a low-interest-rate environment.
New York Federal Reserve President John Williams stated that maintaining current interest rate levels for an extended period will allow policymakers to assess economic conditions before deciding on future adjustments.
Investors are also closely watching upcoming U.S. economic data, including:
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Job openings report (April 1)
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ADP employment report (April 2)
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Non-farm payrolls report (April 4)
These indicators could offer further insights into the Federal Reserve’s rate-cut trajectory and influence gold’s price movement.
Other Precious Metals Trends
In addition to gold’s rally, other precious metals also showed mixed movements:
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Silver rose 0.2% to $34.13 per ounce
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Platinum remained unchanged at $992.70 per ounce
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Palladium gained 0.8% to $990.34 per ounce
As geopolitical and economic uncertainty looms, market watchers expect gold to remain in focus as a preferred asset for investors seeking stability.
