Spot Gold gained over 0.5% on Thursday, while holding within striking distance of record highs, as fresh US auto tariffs added to global trade tensions, fueling safe haven demand.
Yesterday US President Trump announced a 25% tariff on imported cars and light trucks, beginning next week, which further heightened trade tensions.
The Trump administration’s reciprocal tariffs, which are set to take effect on April 2nd, may stoke inflation and hinder GDP growth.
Up next, traders will be expecting the final estimate on US GDP growth for Q4, due out later today, and US PCE inflation report, due out on Friday. Those numbers may provide more insight into the Federal Reserve’s potential course of action in regard to borrowing costs.
Minneapolis Federal Reserve Bank President Neel Kashkari said that despite the progress on inflation, “we have more work to do” to bring inflation down to the central bank’s 2% target.
Spot Gold was last up 0.57% on the day to trade at $3,036.62 per troy ounce.
Uncertainty surrounding US tariffs, potential rate cuts and escalating Middle East tensions have fueled Gold’s rally to a series of record highs this year.
Gold recorded an all-time high of $3,057.21 per troy ounce on March 20th.
According to Aakash Doshi, global head of gold at SPDR ETF Strategy, Gold may overcome the $3,100 threshold in the second quarter and “the market could potentially push another 8%-10% higher by end-2025 if the current macro and physical market tailwinds sustain for the yellow metal.”
At the same time, Goldman Sachs has revised up its year-end Gold price forecast to $3,300 per troy ounce from $3,100 previously on sustained central bank demand.