Gold prices climbed to a new high above $3,200 per ounce due to concerns about the impact of tariffs on the global economy, leading investors to seek the safe-haven asset.
During early Asian trading on Friday, gold surged by as much as 1.4%. The price reached $3,219.48, surpassing the previous record set the day before when it increased by over 3% for the second consecutive day.
The uncertainty surrounding tariffs, exacerbated by conflicting statements from President Donald Trump regarding trade policies, has triggered market turmoil, resulting in selling pressures on US stocks, bonds, and the dollar. This has fueled fears of a potential global recession, casting a shadow over Wall Street. Despite Trump's decision to delay imposing higher tariffs for 90 days on various trading partners, the risks and uncertainties persist, especially with tariffs on all Chinese imports now standing at a minimum of 145%.
In light of these conditions, gold has emerged as a preferred asset for investment. Liu Yuxuan, a precious metal expert at Guotai Jun’an Futures Co in Shanghai, emphasized that the ongoing trade tensions have eroded trust in the US dollar, leading to a surge in demand for alternative safe-haven assets like gold.
There are growing doubts that trade negotiations will be successfully concluded by the upcoming 90-day deadline, despite reassurances from White House Economic Council Director Kevin Hassett about progress in discussions with economic partners.
The soaring gold prices, up more than 20% so far this year, have also been fueled by central banks buying gold and anticipation of further monetary easing by the Federal Reserve. Recent data indicating a general cooling of US inflation in March has prompted market expectations of three interest rate reductions throughout the year, with a possibility of a fourth. Lower interest rates typically boost the appeal of gold as it does not yield interest.
On the other hand, at 9:51 a.m. in Singapore, spot gold was trading 1.1% higher at $3,212.41 per ounce, poised for a weekly gain of nearly 6%. The Bloomberg Dollar Spot Index declined for the fourth consecutive day, while silver prices fell and platinum and palladium prices rose slightly.
This content was created by a WriterAccess writer.