On Thursday, gold prices soared to unprecedented heights as investors flocked to this safe-haven asset amidst rising global trade tensions and declining stock markets. This surge followed U.S. President Donald Trump’s recent announcement of a 25% tariff on imported vehicles, igniting fears of retaliatory measures from other nations. Spot gold rose by 1.2%, reaching $3,057.12 an ounce, while U.S. gold futures jumped 1.5% to hit an all-time high of $3,069.10.

Escalating Trade Tensions

The imposition of new auto tariffs has led to a ripple effect across global markets. Major car manufacturers saw their stock values plummet, contributing to a broader market downturn. According to Bob Haberkorn, a senior market strategist at RJO Futures, the outlook for gold is promising. "We’re likely to see prices approach $3,100 soon, primarily driven by safe-haven demand due to the uncertainty surrounding these tariffs."

• Key points:
  • 25% tariff on imported vehicles announced by Trump.
  • Governments from Canada to France are threatening retaliatory actions.
  • Major car manufacturers’ stocks are affected.

Gold’s Record-Breaking Year

In 2023 alone, gold has achieved 17 record highs, reflecting the growing demand amid economic instability. Strong inflows from central banks and increased ETF investments are further bolstering the metal’s appeal. Phillip Streible, chief market strategist at Blue Line Futures, emphasizes the ongoing support for gold from these market dynamics.

Investors are closely monitoring the upcoming U.S. Personal Consumption Expenditures (PCE) data, which is expected to influence future Federal Reserve rate cuts. Following a recent decision to maintain the current interest rate, the market is eager for indicators that may affect gold’s trajectory.

Silver and Other Precious Metals Rise

In addition to gold, silver prices have also surged, climbing 1.8% to reach $34.30 an ounce—the highest since October 2024. Both platinum and palladium saw gains, with platinum increasing 1% to $984.32 and palladium up 1.3% to $980.25.

Future Outlook

Goldman Sachs has recently adjusted its forecast for gold prices, predicting they could reach $3,300 per ounce by the end of 2025, up from an earlier estimate of $3,100. This adjustment reflects stronger-than-expected demand from ETFs and ongoing interest from central banks.

In summary, as global trade tensions escalate, investors are turning to gold and other precious metals as a safeguard against uncertainty, making for a dynamic and evolving market landscape.