Gold prices surged on Thursday, inching closer to last week’s record high, following U.S. President Donald Trump’s announcement of new tariffs on auto imports, which stoked fears of escalating global trade tensions. Spot gold rose over 1%, reaching $3,052.97 an ounce by 1030 GMT, just shy of the all-time high of $3,057.21 set on March 20. U.S. gold futures also saw a 1.3% increase, climbing to $3,060.90.
Safe-Haven Demand Drives Prices Up
Gold, often seen as a hedge against uncertainty and inflation, has experienced a notable increase of more than 15% this year. The recent spike is largely attributed to growing concerns over trade disputes and the resulting safe-haven demand. “Policymaking coming from the U.S. is driving huge amounts of uncertainty and gold, being the defensive, anti-fragile asset, is largely going up because of those uncertainties,” said Nitesh Shah, a commodities strategist at WisdomTree.
Tariff Announcement Fuels Uncertainty
On Wednesday, Trump unveiled a 25% tariff on imported cars and light trucks, set to take effect next week. This move is part of his broader strategy to address the U.S. trade deficit. The announcement has contributed to an environment of heightened global trade uncertainty, which is fueling demand for gold as a safe investment.
Looking Ahead: U.S. Economic Data in Focus
Market attention is now shifting to Friday’s U.S. personal consumption expenditures (PCE) data, which is the Federal Reserve’s preferred inflation gauge. Traders are eager to see how this data might influence the Fed’s decision-making regarding interest rates. The central bank held its benchmark rate steady last week but signaled that rate cuts could be on the horizon later this year, which would benefit non-yielding assets like gold.
Bullish Outlook for Gold
Analysts remain optimistic about gold’s prospects. “We maintain our bullish stance on gold, though a consolidation is possible after the recent swift rally towards $3,040/oz,” said analysts from ANZ, according to Reuters. Goldman Sachs also raised its end-2025 gold price forecast to $3,300 per ounce, up from $3,100, driven by strong ETF inflows and sustained central bank demand.
Other Precious Metals See Gains
Other precious metals also saw upward movement, with spot silver rising 0.7% to $33.93 an ounce, platinum climbing 0.5% to $979.55, and palladium adding 0.4% to $972.
