Gold prices have reached a new record high as global investors continue to seek refuge in the safe-haven asset following U.S. President Donald Trump’s decision to impose new 25% tariffs on steel and aluminum imports. The move has heightened concerns over a potential trade war, economic uncertainty, and rising inflation, further boosting gold prices.
On the COMEX exchange, gold prices surged past $2,900 per ounce, marking the eighth record-high level of the year. The latest rally has been driven by escalating trade war fears, inflationary pressures, and global economic uncertainty, following Trump’s decision to enforce tariffs “without exceptions or exemptions” to support domestic industries. However, the policy shift has also raised the risk of retaliatory actions from trading partners, intensifying volatility across financial markets.
Geopolitical and Economic Drivers
- President Trump’s interest in developing Gaza has added further uncertainty to the ongoing ceasefire negotiations between Israel and Hamas, creating additional geopolitical instability.
- A supply squeeze in the gold market continues, with an additional 900,000 ounces deposited in COMEX vaults, indicating rising demand.
- The U.S. Dollar Index has rebounded from its recent low of 107.40 to 108.50, partially capping gold’s upside momentum.
- Market participants are closely monitoring key U.S. economic data scheduled for release later this week, including retail sales, industrial production, and inflation reports.
- The focus will also be on Federal Reserve Chair Jerome Powell’s testimony, which could provide further insights into the central bank’s monetary policy stance.
According to Navneet Damani, Head of Commodities Research at Motilal Oswal Financial Services, the current surge in gold prices is fueled by heightened uncertainty in global trade policies and geopolitical risks, making gold an attractive hedge against inflation and financial instability.
With markets on edge due to trade tensions and policy shifts, gold’s bullish momentum could persist as investors continue to hedge against economic volatility.
