Gold Price Hits Record High on Trump Tariff Fears and Global Uncertainty

 

Gold prices have soared to an unprecedented high, surpassing $US 3,100 per ounce, as global markets react to the looming threat of US tariffs and persistent geopolitical instability. 

 

The surge marks one of the most significant rallies in the precious metal’s history, driven by a confluence of factors that have investors seeking safe-haven assets.

 

According to Reuters, spot gold reached a record $US 3,128.06 per ounce on Monday, fuelled by concerns surrounding potential retaliatory tariffs from the US, scheduled for announcement on April 2nd. 

 

The prospect of escalating trade tensions, coupled with ongoing conflicts in the Middle East and the unresolved Russia-Ukraine situation, has created a climate of uncertainty that favours gold.

 

"Geopolitical uncertainty is high," noted Nikos Tsabouras, a senior market analyst at Tradu.com, highlighting President Trump's recent comments on Russia, Iran, and Greenland as contributing to the heightened tension. "This makes gold more attractive." 

 

 

The expected US tariffs, along with automotive tariffs due on April 3rd, have triggered fears of a global economic slowdown. JP Morgan has increased its probability of a US recession to 40%, while economic models suggest a contraction in US GDP. 

 

"The gold market is significantly affected by President Donald Trump's planned tariffs," confirmed Teeradej Sinthopruangchai, Secretary-General of the Gold Traders Association in Thailand, adding that the metal is seen as a "safe-haven asset."
 

 

 

Analysts at Capital Economics believe that central bank purchases, driven by gold's safe-haven status, will continue to push prices higher, potentially exceeding $US 3,300 per ounce by the end of 2025. Goldman Sachs has even more bullish forecasts, predicting prices could reach $US 4,200 by year-end and $US 4,500 by next year.

 

Investor demand is also evident in the increased inflows into gold ETFs, with European investors particularly active. 

 

"The broader trend indicates increased demand from European investors seeking safe-haven assets due to political uncertainty," said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany.

 

Hua Seng Hong analysts observed the gold price surging to its 18th all-time high this year, driven by fears of a trade war-induced recession. 

 

They highlighted the US plan to impose a 25% tariff on car imports and retaliatory tariffs on other nations as key factors. "We expect gold to continue its upward trajectory," they stated, predicting further gains.

 

YLG Bullion International's CEO, Pawan Nawawattanasub, noted the rapid climb of gold prices, prompting them to revise their price target to $US 3,150 - $US 3,200 per troy ounce. 

 

She cited the upcoming US tariff announcement and potential retaliatory measures from countries like China and Mexico as significant drivers. 

 

 

"Investors are seeking safe-haven assets," she explained, but cautioned about potential profit-taking after the tariff announcement.

 

GCAP GOLD's analyst, Areerat Murachai, anticipates continued market volatility and advises investors to monitor the impact of Trump’s tariffs. 

 

She predicts gold’s bullish trend will continue, with short-term targets of $US3,150-$US3,200 per ounce, and potential new highs for Thai gold prices.
 

 

 

In Thailand, the domestic gold market has mirrored the global trend, with prices surging to record levels. The Gold Traders Association has noted the significant impact of the potential US tariffs, prompting investors to seek the security of gold.

 

However, analysts caution that the rapid rise in prices may lead to profit-taking or "sell on fact" scenarios following the tariff announcement. They advise investors to monitor support levels and consider dollar-cost averaging (DCA) for long-term accumulation.

 

As the world awaits the US tariff announcement, the gold market remains highly volatile, with prices expected to fluctuate based on the severity of the tariffs and the subsequent reactions from affected countries.