Gold prices surged to a record high, nearly reaching $3,000 per ounce, as President Donald Trump’s aggressive tariff policies sparked concerns about the potential negative impact on economic growth.
This uncertainty weakened demand for riskier assets and prompted increased investment in gold-backed funds.
Spot gold approached $2,994 per ounce, surpassing its previous high reached on Thursday. This marked a 2.6% increase for the week, positioning gold for its largest gain since November. New York futures, which trade at a premium over spot prices, easily surpassed $3,000 per ounce.
The precious metal’s strong performance this quarter has extended its significant annual gains for 2024, supported by the U.S. administration’s trade policies, which reduced appetite for risk assets like stocks. The S&P 500 index entered correction territory this week. Additionally, central bank purchases, ETF inflows, and a growing number of analysts predicting further price increases have helped drive gold’s rise.
On the trade front, Trump threatened a 200% tariff on European wines, champagne, and other alcoholic beverages. He also indicated that he would not repeal the recently imposed steel and aluminum tariffs, nor back down from plans for wide-ranging tariffs on global trade partners set to take effect by April 2.
“The $3,000 threshold is now in sight,” said Yeap Jun Rong, a market strategist at IG Asia Pte. “As we approach the second quarter, where reciprocal tariffs could trigger more market instability, gold remains an attractive safe-haven asset in an environment where alternatives are limited.”
Gold’s price increase has also benefitted producers in the Asia-Pacific region. Australian-based Evolution Mining Ltd. saw its stock reach an all-time high.
Global holdings in gold-backed ETFs rose to approximately 2,687 tons, the highest since November 2023, according to a preliminary Bloomberg count. Many analysts are now predicting even further price gains, with Macquarie Group forecasting a rise to $3,500 per ounce in the second quarter, and BNP Paribas raising its outlook to show average prices well above $3,000.
At 2:19 p.m. in Singapore, spot gold was trading at $2,983.50 per ounce, up 14% this year. The Bloomberg Dollar Spot Index remained unchanged.
Silver dipped slightly after approaching $34 per ounce, while platinum and palladium saw increases.
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