19 hours ago
Gold prices surged to a new record high on Thursday, April 3, as investors flocked to safe-haven assets following US President Donald Trump's announcement of aggressive tariffs on major trading partners.
The escalating trade war and economic uncertainty fueled strong demand for gold, driving prices above previous highs.
As of 0018 GMT, spot gold was up 0.4% at $3,145.93 per ounce, after touching an all-time high of $3,167.57 per ounce earlier in the session.
Meanwhile, US gold futures firmed 0.1% to $3,170.70 per ounce.
In India, gold prices also witnessed a sharp rise, reaching ₹89,350 per 10 grams. (India Bullion Association data).
The domestic gold market mirrored the international trend, with investors seeking refuge amid rising economic tensions.
Key factors driving gold prices
New US tariffs and global trade war" Trump announced a 10% baseline tariff on all imports to the US along with higher duties on major trading partners, exacerbating global trade tensions.
His administration also confirmed that 25% tariffs on global car and truck imports would take effect on April 3, with additional duties on automotive parts starting May 3.
The move rattled equity markets and heightened economic uncertainty, pushing investors toward gold.
Safe-haven demand and central bank buying: Gold, traditionally seen as a hedge against political and financial turmoil, has surged over 19% in 2024. Central banks globally have increased their gold purchases, further supporting prices.
Weakening US dollar and bond yields: The US dollar index and 10-year bond yields fell to 5-1/2 month lows, making gold more attractive as an alternative investment. Lower yields reduce the opportunity cost of holding non-yielding assets like gold.
Economic data and Fed rate outlook: US private payrolls rose more than expected in March, but economists believe the labor market is slowing. Investors are now eyeing the US non-farm payrolls report on Friday (April 4) for further clues on the Federal Reserve's monetary policy stance. Any indications of interest rate cuts could further boost gold prices.
Rahul Kalantri, VP Commodities at Mehta Equities, provided key support and resistance levels for gold:
Gold (USD): Support at $3,118-$3,095 per ounce, resistance at $3,172-$3,190 per ounce.
Gold (INR): Support at ₹90,480-90,250 per 10 grams, resistance at ₹91,080-91,390 per 10 grams.
Outlook for gold investors
Gold’s bullish trend is expected to continue as geopolitical risks, global economic uncertainty, and central bank policies drive demand. Investors looking to hedge against inflation and volatility may find gold a strategic asset.
However, price corrections could occur depending on upcoming economic data and Federal Reserve decisions.
For long-term investors, analysts recommend allocating a portion of their portfolio to gold to diversify risk. Those considering short-term trades should monitor US economic indicators and geopolitical developments closely.
-With Reuters inputs
