Gold Prices Climb on Safe-Haven Demand Amid U.S. Tariff Fears

Gold prices extended gains on Wednesday, driven by strong safe-haven demand as investors braced for the impact of new U.S. tariffs. Spot gold rose 0.2% to $3,116.72 per ounce as of 0500 GMT, following Tuesday’s record high of $3,148.88. U.S. gold futures were steady at the same level.

Analysts point to geopolitical tensions, fears of a U.S. economic slowdown, and rising inflation risks as key drivers behind gold's surge. Philip Newman, managing director at Metals Focus, noted that persistent geopolitical uncertainty continues to fuel demand for the precious metal. He predicted that gold could reach $3,300 in the coming months, supported by safe-haven buying and potential Federal Reserve rate cuts.

Investor focus remained on the looming U.S. tariffs, which President Donald Trump has labeled “Liberation Day.” Market concerns include the potential for increased inflation, slower economic growth, and escalating global trade tensions. The White House confirmed new tariffs would be introduced, though specifics remain unclear.

Gold, a traditional hedge against inflation and instability, tends to thrive in low-interest-rate environments. Its rally has also been boosted by robust central bank purchases, geopolitical instability in the Middle East and Europe, and growing inflows into gold-backed ETFs.

Aakash Doshi, global head of gold strategy at State Street Global Advisors, suggested that in a bullish scenario, gold prices could test $3,400 per ounce within nine months.

Meanwhile, other precious metals also gained. Spot silver rose 0.2% to $33.80 per ounce, platinum increased 0.8% to $987.31, and palladium advanced 0.4% to $987.00. Traders await key U.S. economic data, including the ADP employment report and Friday’s non-farm payrolls.