Jittery investors flocked to safe-haven assets on Thursday and pushed gold to a record high after U.S. President Donald Trump unleashed more aggressive-than-expected import tariffs, kicking into higher gear an already heated global trade war.
Spot gold was little changed at $3,132.69 as of 0520 GMT, after hitting an all-time high of $3,167.57 earlier in the session.
U.S. gold futures fell 0.4% to $3,155.00.
On Wednesday, Trump unveiled a 10% baseline tariff on all imports to the U.S., and higher duties on dozens of countries, including some of its biggest trading partners, deepening a trade war that has rattled global markets.
One of the reasons gold is supported is because of “the slowdown that tariffs are likely to cause the U.S. economy, raising the prospects of future rate cuts,” Capital.com’s financial market analyst Kyle Rodda said.
The Trump administration confirmed that the 25% 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.
Gold is in “a pure momentum trade, where bulls who were left for dust are agonising on the side line, eager for even the smallest of dips, and until we see a volatile shakeout big enough to stun bulls and bears, the momentum trade could continue higher,” said Matt Simpson, a senior analyst at City Index.
Gold, a hedge against political and financial instabilities, has surged more than 19% year-to-date, mainly driven by tariff jitters, rate cut possibilities, geopolitical conflicts, and central bank buying.
“There’s also some front running going on amongst traders who anticipate (Trump’s) policies will drive central banks to park their reserves in gold rather than U.S. dollar-denominated assets,” Rodda said.
U.S. private payrolls increased more than expected in March, but that did not change economists’ views that the labour market was slowing against the backdrop of mounting economic uncertainty.
Market awaits U.S. non-farm payrolls report due on Friday for clues into the Federal Reserve’s policy path.
Spot silver slipped 2.6% to $33.13 an ounce, platinum fell 1.6% to $968.24, and palladium lost 1.4% to $956.50. – Reuters
