Trump’s new tariffs on the automotive industry have exacerbated trade tensions, which has led to an increase in the price of gold. As a result of the declaration made by President Donald Trump of the United States regarding new tariffs on automobile imports that are scheduled to begin the following week, gold prices reached their highest point in almost a week on Thursday. As a result of this scenario, global trade tensions have been more intense, which has followed by an increase in the demand for gold as a safe-haven asset.
The price of spot gold reached $3,035.98 per ounce at 09:40 GMT, marking its highest level since March 21 earlier in the trading day. This is a 0.6 percent increase from the previous price to the current price. Futures contracts on gold in the United States reached a price of $3,045, representing a gain of 0.8 percent over their previous level. Over the course of this year, gold has experienced a significant appreciation, reaching a record high of $3,057.21 on March 20. Gold has traditionally been considered a hedge against the effects of inflationary pressures and volatility.
According to Nitesh Shah, a commodities analyst at WisdomTree, the policymaking that is originating from the United States is producing substantial uncertainty, which in turn is helping to the increase in gold prices. Gold is viewed as a defensive and anti-fragile asset in the midst of these uncertainties, which is adding to the increase in gold prices. On Wednesday, President Trump made the announcement that he would be imposing a tariff of 25 percent on imported automobiles and light trucks. This tax is slated to go into effect the day after he is due to announce reciprocal duties that would target countries that contribute significantly to the trade imbalance of the United States. In order to get additional insights into the trajectory of the Federal Reserve’s interest rate adjustments, market investors are presently concentrating their attention on the forthcoming release of data on personal consumption expenditures in the United States, which is scheduled to take place on Friday. This data serves as the preferred measure of inflation for the Federal Reserve.
During the previous week, the Federal Reserve did not change its benchmark interest rate, which is an indication that there is a possibility of rate reductions later on in the year. A market climate that is characterized by low interest rates is often favorable for the performance of non-yielding bullion. ANZ analysts have indicated a continued optimistic stance on gold, despite the fact that they have acknowledged the possibility of a stabilization phase following the recent quick advance to $3,040 per ounce.
As of Wednesday, Goldman Sachs revised its forecast for the price of gold at the end of 2025 to $3,300 per ounce, which is an increase from the prior estimate of $3,100. The firm attributed this revision to the solid inflows of exchange-traded funds (ETFs) and the continuous demand from central banks. The price of spot silver remained unchanged at $33.68 per ounce, while platinum saw a fall of 0.2 percent, ending at $973.20, and palladium experienced a decrease of 0.1 percent, reaching $967.08 per ounce.