Gold prices hovered near a record high above $2,900 per ounce on Thursday, as investors continued to seek safe-haven assets amid escalating trade tensions and economic uncertainty.
Gold prices hovers near a record high
The White House announced that President Trump’s reciprocal tariffs could be unveiled as soon as Thursday, adding to concerns of a deepening global trade war. This follows his decision earlier in the week to impose a 25% tariff on steel and aluminum imports, a move that builds on existing levies, including 10% on Chinese goods and 25% on imports from Canada and Mexico—though the latter remain on hold.
Gold demand boosted by US inflationary pressure
In addition to trade worries, persistent inflationary pressures in the US have further fueled demand for gold. Recent inflation data showed that all key metrics exceeded expectations, reinforcing the Federal Reserve’s cautious stance on interest rate cuts. Fed officials have signaled that they are in no rush to ease monetary policy, as inflation remains above target, denting the appeal of non-yielding assets like gold in the short term. However, expectations of prolonged geopolitical uncertainty and potential retaliation from US trade partners have kept gold prices elevated.
Focus on central banks
Meanwhile, global central banks, particularly in China and emerging markets, continue to increase their gold reserves, providing additional support for the metal. With market volatility on the rise and investors bracing for potential disruptions in global supply chains, gold’s role as a hedge against economic instability remains strong. Analysts suggest that any further escalation in trade conflicts or signs of economic slowdown could push gold prices beyond their record levels in the coming weeks.
