Gold prices surged to a new high on Thursday as investors increasingly sought safe-haven assets after U.S. President Donald Trump announced additional import tariffs, further raising concerns about a global trade war.
In the UAE, gold rates saw notable gains, with 24-carat gold rising AED3.5 to AED379.75 and 22-carat increasing by AED3.25 to AED351.75. In addition, 21-carat gold climbed AED3.25 to AED337.25, and 18-carat gold ticked up AED2.5 to AED289.
Globally, spot gold gained 0.71 percent to $3,148.36 as of 4:11 GMT, after hitting an all-time high of $3,167.57 earlier in the session. Gold prices have gained over 7 percent in the last month. Meanwhile, U.S. gold futures jumped 0.13 percent to $3,170.45.
Trump’s tariffs trigger safe-haven demand
On Wednesday, Trump announced a 10 percent baseline tariff on all imports to the U.S. and higher duties on several other countries, including some of the United States’ biggest trading partners, further deepening a global trade war that has impacted markets globally. These moves are expected to slow down U.S. economic growth and raise inflation.
“The U.S. tariff policy has been favorable for gold, helping it set more than 15 records this year and achieve a nearly 19 percent increase year-to-date. This rally, resembling a strong performance seen in 1986, has been driven by consistent central bank buying, expectations of lower interest rates and geopolitical tensions,” said Vijay Valecha, chief investment officer, Century Financial.
The Trump administration also confirmed that the 25 percent global car and truck tariffs will take effect on April 3 as planned, and duties on automotive parts imports will be launched on May 3.
“We raise our 2025 peak gold price to $3,300,” stated Ole Hansen, head of commodity strategy, Saxo Bank. “The gold rally that began in 2022 and which gathered momentum last year continues to be fuelled by an increasingly uncertain geopolitical landscape, where global tensions and economic shifts have led investors to seek safer assets, a development that shows no signs of fading anytime soon,” he added.
U.S. tariff policy raises recession fears
U.S. private payrolls increased more than expected in March. However, economists maintained their view that the labor market was slowing amid mounting economic uncertainty. Investors today await the release of the U.S. non-farm payrolls report for further insights into the Federal Reserve’s policy path. Earlier this week, the Labor Department’s Bureau of Labor Statistics released a report revealing that job openings fell to 7.568 million by the end of February compared with economists’ expectation of 7.616 million.
Gold prices ended their strongest quarter since 1986 on Monday and climbed over the $3,100 mark, recording one of the most significant surges in the precious metal’s history.
On Monday, Goldman Sachs raised the probability of a U.S. recession to 35 percent from 20 percent and said it expected more rate cuts by the Federal Reserve.
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Other precious metals
As gold prices surged to a new high, the precious metals market saw negative movement. Spot silver fell 2 percent to $33.35 an ounce, platinum lost 0.32 percent to $980.35, and palladium declined 0.64 percent to $963.69.
