Gold has reached an all-time high of $3,157.23 per fine ounce, following the recent announcement of new tariffs by US President Donald Trump. This price surge marks a significant milestone in a year that has already seen gold prices set multiple records. The rise is largely driven by growing investor concerns over Trump’s unpredictable tariff policies and the potential for an escalating trade war.
On April 1, 2025, gold prices climbed to $3,148, just one day before Trump’s anticipated announcement regarding reciprocal tariffs. This rally follows a 20 percent increase in gold’s price since January, and a 40 percent rise over the past year, fueled by geopolitical tensions and inflation fears.
Tai Wong, an independent metal trader, stated, “The retaliatory tariffs are more aggressive than expected. The prospects for gold are excellent, with $3,200 as the new short-term target.” His comments reflect investor sentiment seeking safe-haven assets amid rising market volatility.
In response to Trump’s tariff announcement, Canadian Prime Minister Mark Carney has promised countermeasures, expected to be revealed on April 3, 2025. Carney stressed the need for decisive action, highlighting global concerns over the repercussions of US trade policies.
US Treasury Secretary Scott Bessent warned that retaliatory measures could escalate into a global trade war, which would harm all parties involved. The US has also imposed a 31 percent tariff on imports from Switzerland, complicating international trade relations.
Additionally, Trump has ended the tariff exemption for small package shipments from China, a measure aimed at curbing the flow of illegal synthetic opioids. This new regulation affects packages under $800, which have surged in volume, with nearly 1.4 billion shipped in 2024, 60 percent of which originated from China.
Analysts suggest that the gold rally is not just a short-term trend. Amy Gower, a commodity strategist at Morgan Stanley, cited strong physical demand for gold and a favorable macroeconomic environment. Gower predicts gold could reach $3,300 to $3,400 later this year, a forecast echoed by major banks like Goldman Sachs, which has raised its target for gold to $3,300 per ounce by year-end.
As fears of a global trade war rise, gold’s appeal as a safe haven has increased. Gold-backed ETFs saw a 6 percent rise, with $19 billion invested in the first quarter of 2025, reversing years of net outflows. US Treasury bonds have also seen increased demand, highlighting the shift in investment strategies.
Despite gold’s strong performance, some analysts warn the market may soon experience a consolidation period after such significant gains. Technical indicators suggest gold has entered extreme territory, and the tariff announcement could trigger a “buy on the rumor, sell on the news” scenario.
The geopolitical landscape remains tense, with conflicts such as the situation in Ukraine and escalating violence in the Middle East adding to global market pressures. These factors continue to drive investors towards gold, which remains a hedge against inflation and economic uncertainty.
In summary, the recent surge in gold prices reflects heightened investor anxiety over trade tensions and economic instability. As global responses to the US’s tariff policies unfold, the dynamics of international trade and investment will continue to influence gold’s trajectory as a favored asset.
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