Gold prices surged to a record high on Thursday as escalating trade war fears, fueled by U.S. President Donald Trump’s tariff threats, increased safe-haven demand for the precious metal.
Gold Prices and Market Performance
Spot gold rose 0.4% to $2,944.38 an ounce by 11:28 a.m. ET (1628 GMT), after hitting an intraday high of $2,954.69, marking its tenth record high this year. U.S. gold futures gained 0.9% to $2,962.30. Gold has gained 12% so far this year as investors seek safety amid geopolitical uncertainties.
“Ongoing trade tensions continue to stoke inflation and growth concerns and therefore safe-haven interest in gold,” said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Impact of U.S. Tariff Threats
Trump announced on Wednesday that he would introduce tariffs on lumber, cars, semiconductors, and pharmaceuticals “over the next month or sooner.” Since taking office, he has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and aluminum.
“We continue to see central bank buying throughout the year, which is one of the main underlying factors of support. We are also seeing ETF flows with three straight days of inflows into the gold market,” said Phillip Streible, chief market strategist at Blue Line Futures.
Geopolitical Tensions and Economic Impact
Trump also labeled Ukrainian President Volodymyr Zelenskiy as a dictator on Wednesday, urging him to secure peace quickly to avoid losing his country. A potential peace deal could momentarily lower geopolitical tensions and weigh on gold prices in the short term.
However, Peter Grant of Zaner Metals noted, “The all-time high could hold for a number of weeks as there are sufficient fundamental factors that remain very supportive.”
Federal Reserve’s Stance and Inflation Concerns
Minutes from the Federal Reserve’s latest policy meeting showed that Trump’s initial policy proposals had heightened inflation concerns, supporting the central bank’s decision to pause further rate cuts.
Precious Metals Market Overview
Gold exports from Switzerland rose year-on-year in January, with shipments to the U.S. reaching their highest level in at least 13 years, according to Swiss customs data. Other precious metals also gained, with spot silver rising 1% to $33.04 an ounce, platinum up 0.7% to $978.48, and palladium advancing 1.5% to $982.41.
