Gold prices experienced a notable increase on Thursday as escalating U.S. auto tariffs intensified global trade tensions, particularly with a looming April 2 deadline for reciprocal tariffs from the United States. As of 0535 GMT, spot gold climbed by 0.5%, reaching $3,033.20 per ounce. Similarly, U.S. gold futures saw a rise of 0.6%, settling at $3,039.00.
Escalating Trade Tensions Impacting Gold
On Wednesday, President Donald Trump announced a 25% tariff on imported cars and light trucks, further igniting the ongoing global trade conflict. Investors are increasingly worried that these reciprocal tariffs, set to take effect soon, could lead to inflationary pressures, sluggish economic growth, and heightened trade disputes. These tariff concerns have propelled gold prices to a historic peak of $3,057.21 on March 20.
Market Predictions for Gold
Aakash Doshi, the global head of gold at SPDR ETF Strategy, forecasts a bullish trend for gold, predicting it could surpass $3,100 in the second quarter. He stated, “The market could potentially push another 8%-10% higher by the end of 2025 if the current macroeconomic and physical market conditions remain favorable for gold.”
Goldman Sachs Adjusts Gold Price Forecast
In a recent update, Goldman Sachs raised its gold price outlook for the end of 2025 to $3,300 per ounce, up from $3,100. This revision reflects stronger-than-anticipated inflows into exchange-traded funds (ETFs) and continuing robust demand from central banks. Investors are also keenly awaiting the U.S. personal consumption expenditures data set to release on Friday, which may provide further clarity on the trajectory of U.S. interest rates.
Ilya Spivak, the head of global macro at Tastylive, emphasized that “the March high near $3,057 is immediate resistance for gold prices, with the $3,100 level following closely behind.” Recently, the U.S. central bank maintained its benchmark interest rate, signaling potential rate cuts later this year. Gold, as a non-yielding asset, typically benefits from low interest rates.
Inflation Concerns Persist
Neel Kashkari, President of the Minneapolis Federal Reserve Bank, acknowledged the progress the U.S. central bank has made in reducing inflation but stressed, “We still have more work to do” to reach the Fed’s target of 2%.
In other precious metals, spot silver dipped by 0.1%, trading at $33.68 per ounce, while platinum saw a decline of 0.3%, now priced at $971.60.
Investors are advised to keep an eye on upcoming economic indicators and further developments in trade policy, which could significantly influence gold and other precious metal markets in the near future.
