Gold prices witnessed a sharp recovery on Thursday as investors increasingly sought safe-haven assets following the latest U.S. tariff increase on China despite a 90-day pause on tariffs for other countries.
In Dubai, gold rates marked notable gains, with 24-carat gold rising AED4.25 to AED374.75 and 22-carat gold increasing AED3.75 to AED347. Additionally, gained AED3.75 to AED332.75, while 18-carat gold edged up AED3.25 to AED285.25.
Globally, spot gold rose 1.37 percent to $3,124.75 as of 4:05 GMT. Meanwhile, U.S. gold futures gained 2.12 percent to $3,144.67.
Trump raises China tariffs to 125 percent
U.S. President Donald Trump said on Wednesday that he would raise tariffs on Chinese imports to 125 percent from 104 percent. The world’s two largest economies have engaged in a series of tit-for-tat tariffs over the past week. However, Trump decided to temporarily lower duties he recently imposed on several countries.
Analysts now expect that any impact of the tariffs on economic growth will lead to a decline in interest rates, which would be supportive of a rise in gold prices. They also expect bullion to surpass $3,200 by the end of the month.
“The combination of heightened global economic tensions, the risk of stagflation, a weaker dollar combined with falling U.S. real yields as inflation expectations rise, will, in our opinion, continue to support bullion, and to a certain extent also silver,” stated Ole Hansen, head of commodity strategy, Saxo Bank.
Gold, a traditional hedge against economic uncertainties and inflation, has increased by more than 18 percent in 2025, driven largely by Trump’s tariff plans, expectations of interest rate cuts by the Federal Reserve, geopolitical tensions in the Middle East and Ukraine, strong central bank buying and increased investments in gold-backed exchange-traded funds.
“A growing number of central banks are diversifying their reserves away from the U.S. dollar, often turning to gold as a neutral reserve asset. Notably, China, India, Turkey and Russia have been leading this trend. According to official data, the People’s Bank of China (PBoC) increased its gold reserves in March for the fifth consecutive month, underscoring sustained institutional demand,” added Hansen.
Fed policymakers cautious
According to minutes from the Federal Reserve‘s latest meeting, policymakers largely shared the same sentiment last month, warning that the U.S. economy faced risks of higher inflation alongside slower growth, with some noting “difficult tradeoffs” may lie ahead. If higher inflation forces the Fed to keep interest rates higher, gold prices will likely be impacted since bullion thrives in a low interest rate environment.
“Adding to this a market that is now aggressively positioning for the Fed to deliver more cuts this year—at current count almost 100 basis points of easing by year end,” added Hansen.
Traders now await the release of the U.S. Consumer Price Index data, due later in the day, and the Producer Price Index on Friday for further insights into the Fed’s rate cut outlook.
Inflation in the U.S. is expected to rise at an annual pace of 2.6 percent in March, down slightly from the 2.8 percent reported in February. The core CPI, which excludes the volatile food and energy categories, is expected to ease to 3 percent in the same period from a year earlier, compared to a 3.1 percent growth in the previous month.
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Other precious metals
As gold prices recovered from their recent decline, the precious metals market saw mixed movement. Spot silver gained 0.26 percent to $31.11 an ounce while platinum lost 0.17 percent to $935.75. In addition, palladium fell 0.81 percent to $924.02.
