Gold Hits Record High Amid Tariff Tensions and Inflation Fears

Gold prices surged to a record high on Tuesday as investor concerns over U.S. President Donald Trump’s upcoming reciprocal tariffs fueled fears of rising inflation and slowing economic growth. Spot gold climbed 0.6% to $3,142.83 per ounce by 0310 GMT, after reaching a historic peak of $3,145.38 earlier. U.S. gold futures also advanced, gaining 0.7% to $3,171.80.

The rally comes on the heels of gold's strongest quarterly performance since 1986, highlighting its appeal as a safe-haven asset during periods of economic and geopolitical uncertainty. Market sentiment has shifted toward defensive positioning ahead of Trump’s planned announcement of sweeping tariffs on April 2, dubbed “Liberation Day,” which will reportedly target all nations.

IG market strategist Yeap Jun Rong noted that while technical indicators suggest gold may be overbought in the short term, ongoing uncertainty could push prices toward the $3,200 level. The tariffs, particularly those targeting the automobile sector from April 3, are being closely watched by investors seeking to hedge against market volatility.

Gold’s momentum is further supported by the low-interest-rate environment, which reduces the opportunity cost of holding non-yielding assets like bullion. New York Fed President John Williams emphasized that maintaining current interest rates for now allows policymakers to assess incoming economic data before adjusting their stance.

Investors are also eyeing key U.S. labor data this week, including job openings, the ADP employment report, and Friday’s non-farm payrolls, which could influence the Federal Reserve’s future rate-cut decisions.

Meanwhile, silver edged up 0.2% to $34.13 per ounce, platinum remained steady at $992.70, and palladium rose 0.8% to $990.34, reflecting broad demand for precious metals amid global uncertainty.