Gold prices tumbled more than 3% on Thursday, sinking below $3,060 per ounce after briefly hitting a record high above $3,160 earlier in the session.
Gold falls from record high
The sharp reversal came after reports confirmed that precious metals were not included in President Trump’s sweeping "reciprocal" tariffs, dampening expectations of a supply squeeze that had fueled recent price gains.
Gold inventories in COMEX warehouses across the U.S. have surged in recent months, as traders anticipated that import tariffs could disrupt shipments. However, with gold exempt from the latest trade restrictions, concerns over supply chain disruptions eased, prompting a wave of profit-taking. Still, losses were cushioned by ongoing worries about the tariffs' broader impact on global inflation and economic growth, as well as expectations of Federal Reserve rate cuts, strong central bank purchases, and robust demand for gold-backed ETFs.
Rush to safe-have as Trump announces tariffs
On Wednesday, Trump announced a 10% baseline tariff on all imports, with significantly higher levies on key trade partners, including a 34% duty on Chinese goods, 20% on European Union exports, and 24% on Japanese imports. Additionally, a 25% tariff on all foreign-made automobiles officially took effect on Thursday, raising concerns about retaliatory measures and potential economic fallout.
Meanwhile, investors are closely watching economic data for clues on the Federal Reserve's next move. Friday’s U.S. non-farm payrolls report is expected to provide further insights into labor market conditions and whether the Fed may adjust its monetary policy stance in response to mounting trade uncertainties and inflation risks.
