Gold soared to a historic peak on Tuesday, driven by investor anxiety over US President Donald Trump’s proposed reciprocal tariffs, which have raised fears of rising inflation and a potential economic slowdown.
Spot gold climbed 0.6 per cent to $3,143.05 per ounce by 11:30 AM approximately on Tuesday, briefly touching a record high of $3,148.88 earlier in the session, reported Reuters.
US gold futures mirrored the trend, advancing 0.6 per cent to $3,169.50. The latest rally followed a robust performance in the previous session, where bullion recorded its strongest quarterly gain since 1986, underscoring its appeal as a safe-haven asset in times of uncertainty, the report noted.
“The anticipation of the April 2 US reciprocal tariffs has led market participants to lean towards a defensive stance, with some de-risking and turning to safe-haven gold as a hedge against impending portfolio volatility,” IG market strategist Yeap Jun Rong said.
The analyst explained, “While technical indicators suggest overextension in the near term, uncertainty surrounding the tariffs is likely to sustain gold’s traction for now, with buyers seemingly eyeing for a retest of the $3,200 level next.”
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Market Braces for Tariff Impact
Trump is set to unveil a sweeping tariff plan on Wednesday, branding it “Liberation Day.” The plan is expected to impose reciprocal tariffs on all trading partners, a move Trump argues will shield the domestic economy from what he perceives as unfair global competition.
Markets are also closely watching new tariffs on automobiles, scheduled to take effect on April 3, as they could have far-reaching implications on global trade and inflation.
Gold’s performance is further bolstered by expectations around US monetary policy. New York Federal Reserve President John Williams stated that maintaining current interest rates “for some time” would provide officials with the flexibility to assess economic data before making further decisions. Lower interest rates typically enhance gold’s appeal by reducing the opportunity cost of holding non-yielding assets like bullion.
Investors are now focusing on key US economic data releases, including job openings due later today, the ADP employment report on Wednesday, and the non-farm payrolls report on Friday, which could offer more clarity on the Federal Reserve’s future policy stance.
Meanwhile, in other precious metals, spot silver slipped 0.1 per cent to $34.04 per ounce, platinum dipped 0.1 per cent to $991.41, while palladium edged up 0.8 per cent to $989.19.
