On Thursday, gold prices skyrocketed to unprecedented levels as investors flocked to this safe-haven asset amid rising global trade tensions and declining stock markets. This surge followed U.S. President Donald Trump’s announcement regarding new auto tariffs, prompting a rush for bullion. As of 11:17 a.m. ET, spot gold prices increased by 1.2%, reaching $3,057.12 per ounce, and even peaked at an all-time high of $3,059.30 earlier in the day. This marks the 17th record high for gold in 2023.
Uncertainty Fuels Gold’s Ascent
- U.S. gold futures also saw impressive gains, climbing 1.5% to $3,069.10, with an earlier record of $3,070.90 during the session.
- Bob Haberkorn, a senior market strategist at RJO Futures, commented, “It appears we might soon witness gold futures reaching $3,100, primarily due to safe-haven buying driven by uncertainty surrounding Trump’s tariff initiatives.”
Global Reactions to Tariff Announcements
Following the announcement of a 25% tariff on imported vehicles, which is set to take effect shortly after Trump reveals reciprocal tariffs targeting countries he blames for the U.S. trade deficit, reactions from governments worldwide have been swift. Nations from Ottawa to Paris have threatened retaliation, contributing to a downward trend in global stock markets, particularly affecting major automakers.
Strong Demand for Gold Continues
Market analysts highlight that strong inflows from central banks and increased demand for Exchange-Traded Funds (ETFs) are bolstering gold prices. Phillip Streible, chief market strategist at Blue Line Futures, noted the ongoing support from these factors, indicating that gold remains a popular choice during times of economic uncertainty.
What’s Next for Investors?
Investors are keenly awaiting the U.S. Personal Consumption Expenditures (PCE) data scheduled for release on Friday, which could provide insights into potential future interest rate cuts. This comes after the Federal Reserve opted to maintain its benchmark interest rate during last week’s meeting. Gold is traditionally viewed as a hedge against both economic and political instability, often performing well in a low-interest rate climate.
In a recent update, Goldman Sachs has increased its gold price forecast for the end of 2025, raising it from $3,100 to $3,300 per ounce, attributing this adjustment to stronger-than-expected ETF inflows and consistent demand from central banks.
Other Precious Metals on the Rise
- Spot silver also experienced a boost, rising 1.8% to $34.30 per ounce, marking its highest level since October 2024.
- Platinum prices increased by 1%, reaching $984.32 per ounce, while palladium saw a 1.3% rise to $980.25.
As the global economic landscape continues to evolve, the gold market remains a focal point for investors navigating these turbulent times.
