Gold prices surged past $3,100 per ounce on Monday, hitting an all-time high of $3,115.79 as investors flocked to the safe-haven asset amid escalating fears of a global trade war and economic fallout driven by U.S. President Donald Trump’s tariff plans.
Spot gold climbed by 0.9% to $3,110.81 per ounce as of 0444 GMT, marking a significant milestone in its ongoing rally. This surge builds on a more than 8% gain in March, driven by anxiety over the potential expansion of the trade conflict.
Trade War Fears and Tariff Concerns
As the U.S. prepares to announce reciprocal tariffs on April 2, with auto tariffs set to take effect on April 3, markets have been rattled by fears of heightened trade tensions. On Sunday, President Trump added fuel to the fire by stating he was “pissed off” at Russian President Vladimir Putin, threatening secondary tariffs of 25%-50% on buyers of Russian oil if Moscow obstructs efforts to end the war in Ukraine.
Tim Waterer, chief market analyst at KCM Trade, remarked, “Markets’ anxiety levels have been ramping up ahead of the reciprocal U.S. tariff announcements, which is keeping gold in high demand as a defensive play.” However, he cautioned that if the tariff measures are less severe than anticipated, profit-taking could push gold prices lower.
Gold’s Strong Performance and Rising Inflation Concerns
Gold has gained more than 18% this year, solidifying its position as a key asset during times of political and economic uncertainty. The recent rally has prompted several financial institutions to revise their gold price forecasts for 2025, raising expectations for continued growth.
Amid these concerns, Mary Daly, President of the San Francisco Federal Reserve Bank, expressed doubts about her earlier expectations for two interest rate cuts this year, after recent inflation data has reduced her confidence in those predictions.
Silver, Platinum, and Palladium
Alongside gold, other precious metals have also seen gains. Spot silver rose by 0.7% to $34.35 per ounce, while platinum remained steady at $984.07 and palladium gained 0.5% to $976.72. All three metals are on track to finish the month with gains.
As the trade war continues to unfold and geopolitical tensions remain high, investors are expected to keep seeking refuge in precious metals like gold, solidifying its role as a hedge against uncertainty.
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