Gold prices climbed on Thursday as investor concerns grew over U.S. President Donald Trump’s plans to introduce reciprocal tariffs next week. This follows his recent announcement of a 25% tariff on imported cars and light trucks, escalating global trade tensions.
Key Drivers Behind Gold’s Price Surge
- Tariff Impact on Inflation and Economic Growth: Investors worry that Trump’s reciprocal tariff policies, set to take effect on April 2, could fuel inflation, slow economic growth, and further strain international trade relations.
- Gold Hits Record High: Amid market uncertainty, gold reached an all-time high of $3,057.21 on March 20, as investors sought safe-haven assets.
- Federal Reserve’s Stance on Inflation: Minneapolis Federal Reserve Bank President Neel Kashkari acknowledged the central bank’s progress in controlling inflation but emphasized that more work is needed to reach the Fed’s 2% target.
- Interest Rate Speculations: While the Federal Reserve kept its benchmark interest rate steady last week, it signaled potential rate cuts later this year. Lower interest rates tend to boost demand for non-yielding assets like gold.
- Upcoming Economic Data: Investors are closely watching U.S. personal consumption expenditures data, scheduled for release on Friday, which could provide further insights into future interest rate moves.
- Goldman Sachs Revises Forecast: On Wednesday, Goldman Sachs raised its end-2025 gold price forecast to $3,300 per ounce from $3,100, citing stronger-than-expected exchange-traded fund (ETF) inflows and heightened market uncertainty.
Market Outlook: Will Gold Prices Continue to Rise?
With escalating trade tensions, inflation fears, and potential interest rate cuts on the horizon, gold is expected to remain a favored safe-haven asset. If economic uncertainties persist, analysts anticipate further price gains in the coming months.
