As investors sought refuge in gold due to worries about the effects of tariffs on the world economy, gold hit a new high above $3,200 an ounce.
In early Asian trade on Friday, the price of gold increased by as much as 1.3%. For the past several days, it has ended more than 3% higher than it did on Thursday, surpassing the previous record.
Gold’s reputation as a haven has been highlighted this week as Wall Street was gripped by worries of a global recession and President Donald Trump’s inconsistent messaging on his tariff program caused panic selloffs for US equities, Treasuries, and the currency. Even after his 90-day tariff halt on additional levies that affected dozens of trading partners, and with taxes on all Chinese imports now at least 145%, risks and uncertainty persisted.
The US is “well advanced” in its negotiations with economic partners, according to White House Economic Council Director Kevin Hassett, but there is growing doubt that trade talks will be concluded in a timely way.
Hopes for more monetary easing by the Federal Reserve and central bank purchases have also contributed to gold’s more than five percent increase this year. According to statistics released on Thursday, underlying US inflation slowed significantly in March. As a result, traders are already factoring in the possibility of a fourth interest rate decrease in addition to the three forecasted for the rest of the year. Since gold doesn’t pay interest, lower rates usually favour it.
On Bloomberg Television, Dominic Schnider, head of commodities and Asia Pacific currencies at UBS Global Wealth Management, stated, “We are still very optimistic about gold.” “The Fed moving in at some point will be the next step, and that gives the next leg up for gold.” In Singapore, spot gold was up 1.2% at $3,215.73 an ounce at 8:43 a.m., setting it up for a weekly gain of about 6%. It was the fourth day that the Bloomberg Dollar Spot Index declined. Palladium was mostly unchanged, but silver and platinum increased.
