Gold prices reached an all-time high on Tuesday, as investor concerns over US President Donald Trump’s new tariff policies fueled demand for the precious metal.
The market rally comes ahead of Trump’s anticipated tariff announcement on Wednesday, which he has labeled “Liberation Day.”
As of 0550 GMT, spot gold was trading at $3,143.05 per ounce, after touching a record $3,148.88 earlier in the session. US gold futures also climbed 0.6% to $3,169.50.
Gold is often seen as a safe-haven asset during times of economic and geopolitical uncertainty. Analysts point to multiple factors contributing to the metal’s historic rise, including:
Trump’s trade war escalation: The president’s new tariff plan is expected to target multiple trading partners, raising fears of inflation and slower economic growth.
Global economic concerns: A report from Aston Business School estimates that a full-blown trade war could result in a $1.4 trillion loss in global welfare.
Stock market volatility: The S&P 500 has fallen 4.5% this year, driving investors to move funds into more stable assets.
Central bank demand: Ongoing geopolitical tensions, including conflicts in Ukraine and Gaza, have led central banks to increase gold reserves.
IG market strategist Yeap Jun Rong noted that many investors are shifting towards a defensive stance, using gold to hedge against market volatility. He added that while gold prices may be overextended in the short term, uncertainty surrounding trade policies could sustain its momentum.
Some analysts predict that if tariff concerns persist, gold prices could soon test the $3,200 level. However, the Commodity Futures Trading Commission has warned that gold can be a volatile investment, with price fluctuations driven largely by market sentiment and economic conditions.
With input from the Guardian, the Associated Press, and Reuters.
