Gold prices surged to a record high on Monday, driven by worries regarding global economic growth amid the escalating Sino-U.S. trade war, with a weaker dollar further enhancing the rally.Â
In Dubai, gold rates marked notable gains, with 24-carat gold rising AED4.5 in the past 24 hours to AED405.25 and 22-carat gold rising to AED375.25. Additionally, 21-carat gold gained AED4.00 during the same period to AED360.00, while 18-carat gold edged up AED3.5 to AED308.50.
Spot gold advanced by 1.7 percent to $3,383.87 an ounce as of 02:46 GMT, after reaching a new record high of $3,384 earlier in the session. U.S. gold futures climbed by 2 percent to $3,396.10.
Dollar index hits three-year low
The dollar index has hit a three-year low, making gold more appealing for holders of other currencies.
“Fundamentally, markets are pricing in heightened geopolitical risks, driven by U.S. tariff tensions and stagflation concerns, while resilient central bank demand offers an added tailwind for prices as well,” reported Reuters, citing IG market strategist Yeap Jun Rong. On April 2, U.S. President Donald Trump announced “reciprocal tariffs” on numerous countries. While his administration has temporarily paused levies for some nations, it has intensified its trade conflict with China.
China issues warnings amid trade negotiations
China, on Monday, cautioned countries against pursuing a broader economic agreement with the United States at its expense, a maneuver Trump is reportedly seeking from nations looking for tariff reductions or exemptions.
In the meantime, Trump launched a series of criticisms against Federal Reserve Chair Jerome Powell on Thursday, with his team evaluating the possibility of terminating Powell’s position. “The next potential milestone for gold could be around the $3,500 level, though positioning may appear crowded in the near term and technical indicators suggest near-term overbought conditions,” Rong stated.
Spot silver increased by 0.3 percent to $32.66 an ounce, platinum gained 0.3 percent to $969.68, while palladium experienced a decline of 0.3 percent to $959.43.
Gold shipments to Switzerland reverse after tariff exemptions
On Thursday, Reuters reported that gold, which traders have been transporting to New York since December as a precaution against potential broad U.S. tariffs affecting bullion imports, is now being shipped back to Switzerland, its original source, according to official data.
Swiss customs data released on Thursday indicated that the country’s gold imports from the U.S. reached a thirteen-month high of 25.5 metric tons in March, up from 12.1 tons in February. In contrast, gold exports from Switzerland to the U.S. decreased by 32 percent month-on-month to 103.2 tons.
Comex sees record gold outflows
U.S. warehouses approved by Comex, part of the CME Group, have experienced eight consecutive days of gold outflows for the first time in fourteen months, as daily Comex data revealed. The U.S. futures premium has gradually wound down following significant dislocations. During the December-March period, gold, silver, and platinum valued at over $80 billion were delivered to Comex warehouses, leading to increased activity among logistics firms and Swiss refineries.
Read more: Dubai gold prices surpass AED400 as global rates hit new record high
Tariff exclusions impact gold flow
The urgency to transport gold and ship silver to New York diminished when Washington exempted these metals from President Donald Trump’s reciprocal tariffs two weeks ago, prompting a slow reversal of the flow back towards Switzerland.
Comex gold stocks have decreased by 1.5 million troy ounces, valued at $4.8 billion, bringing the total to 43.6 million ounces (1,357 metric tons) since peaking at an all-time high of 45.1 million ounces on April 4. These stocks had initially risen from 17.1 million ounces following Trump’s reelection.
U.S. vaults continue to serve as a hedge
A source from a Swiss refinery indicated that part of the gold currently being delivered out from U.S. vaults is returning to Switzerland, the world’s largest bullion refining and transit hub. The outflow from the U.S. is expected to be modest for now, as gold in the country’s vaults continues to act as a hedge against ongoing market uncertainties.
In a typical year, the U.S. consumes about 115 tons of gold in physical coins and bars. This means that the remaining kilobars in CME-registered warehouses are adequate to meet this segment of the market’s needs for nearly 12 years, noted Ross Norman, an independent analyst.
