Gold prices reached a new high on Tuesday due to worries that President Donald Trump's reciprocal tariffs could lead to inflation and hinder economic growth, prompting increased demand for safe-haven assets.
The price of spot gold rose by 0.6% to $3,142.83 per ounce and hit an all-time peak of $3,145.38 earlier in the day. U.S. gold futures also climbed by 0.7% to $3,171.80.
During the previous trading session, gold experienced its strongest quarter since 1986, signaling a significant surge in the precious metal's value.
Market strategist Yeap Jun Rong from IG noted that investor caution ahead of the upcoming U.S. reciprocal tariffs on April 2 is driving interest in gold as a safe-haven investment to shield against potential portfolio volatility.
While technical indicators indicate a potential correction in the short term, the uncertainty surrounding the tariff announcements is expected to maintain gold's momentum, with buyers eyeing a potential retest of the $3,200 level.
President Trump is set to unveil major tariff measures on "Liberation Day" to safeguard the U.S. economy from global competition, affecting all nations. The market is also closely watching for the implementation of automobile tariffs on April 3.
Gold is viewed as a reliable hedge during times of geopolitical and economic uncertainty, particularly in a low-interest-rate environment.
New York Federal Reserve President John Williams suggested that maintaining current interest rates for some time will allow policymakers to assess incoming economic data and make informed decisions about future actions.
Upcoming U.S. economic data releases, including job openings, the ADP employment report, and the non-farm payrolls report, are expected to provide insights into the Federal Reserve's approach to interest rate adjustments.
Meanwhile, spot silver rose by 0.2% to $34.13 per ounce, platinum remained steady at $992.70, and palladium increased by 0.8% to $990.34.
(Adapted from the report by Anjana Anil and Anushree Mukherjee; Edited for clarity)