Gold prices strengthened on Tuesday amid ongoing uncertainty surrounding U.S. President Donald Trump’s tariff plans and their potential impact on the global economy.
In Dubai, gold rates achieved remarkable gains, with 24-carat gold rising by AED0.5 to AED389, and 22-carat gold increasing by AED0.5 to AED360. 25. Furthermore, 21-carat gold climbed AED0.25 to AED345.25, while 18-carat gold edged up AED0.25 to AED296.
Spot gold gained 0.4 percent to $3,221.70 an ounce, as of 02:45 GMT. Bullion hit a record high of $3,245.42 on Monday. U.S. gold futures also rose 0.4 percent to $3,237.60. “Gold continues to firm today… on ongoing investors’ demand for defensive assets to mitigate portfolio volatility as the U.S. seems to be setting the stage for more tariffs to come,” reported Reuters, citing IG market strategist Yeap Jun Rong.
The U.S. is proceeding with investigations into imports of pharmaceuticals and semiconductors, aiming to impose tariffs on both sectors based on the reasoning that extensive reliance on foreign production of medicine and chips poses a national security threat, as revealed by Federal Register filings on Monday. Trump indicated on Sunday that he would announce the tariff rate on imported semiconductors within the next week, keeping market participants on edge.
Continued support for gold prices
With gold prices recently hitting a new high, the upward trend remains intact. Yeap noted that as long as tariff uncertainties persist, bullion is likely to remain supported. Meanwhile, Atlanta Federal Reserve Bank President Raphael Bostic stated that the uncertainty surrounding tariffs and other policies has led the economy into a “big pause,” suggesting that the U.S. central bank should maintain its current stance until more clarity emerges.
Gold as a hedge against economic uncertainty
Non-yielding gold acts as a traditional hedge against global uncertainty and inflation, thriving particularly in a low-interest-rate environment. Investments in Chinese physically-backed gold exchange-traded funds have already surpassed those for the entirety of the first quarter and outpaced inflows recorded by U.S.-listed funds, according to data from the World Gold Council.
Read more: Dubai gold prices up AED3.25, global rates retreat post tariff exemptions
Fluctuations in precious metal prices
Spot silver lost 0.4 percent to $32.22 an ounce, platinum rose 0.1 percent to $952.60, and palladium eased 0.7 percent to $949.92. Gold prices witnessed a pullback on Monday after reaching a record peak earlier in the session, as trade tensions relaxed following President Trump’s decision to exempt smartphones and computers from “reciprocal” U.S. tariffs.
On Friday, the White House announced exclusions from steep reciprocal tariffs. However, Trump reiterated on Sunday that the exemption for smartphones and computers would be short-lived. “Ongoing trade and tariff dramas have created higher volatility and uncertainty levels in financial markets, and in such an environment, the gold price could be eyeing off a run towards $3,300 in the near term should dollar weakness persist,” noted Waterer. Non-yielding gold is traditionally viewed as a hedge against economic uncertainty and inflation.
Record surge in gold prices
Gold prices surged past the $3,200-per-ounce mark for the first time on Friday, driven by escalating U.S.-China trade tensions that unsettled global markets. Goldman Sachs has raised its end-2025 gold price forecast to $3,700 per ounce from $3,300, attributing this adjustment to stronger-than-expected demand from central banks and increased ETF inflows. Traders anticipate around 80 basis points worth of cuts by the end of 2025, as bullion often thrives in a low-interest-rate environment.
