Gold prices reached an unprecedented high exceeding $3,200 an ounce, climbing as much as 1.9% to $3,237.89 on Friday and continuing a weekly increase of about 6%. This surge highlights gold’s status as a financial safe haven during economic uncertainty.
The primary driver has been President Trump’s inconsistent tariff policies, which have triggered significant selloffs across US stocks, bonds, and the dollar markets as recession fears spread. Despite announcing a 90-day pause on tariff increases for most trading partners, duties on all Chinese imports remain at least 145%.
China responded by raising tariffs on US goods to 125% while dismissing the US administration’s actions as a “joke” not worth matching. Market experts, including Shanghai-based precious metal researcher Liu Yuxuan, view gold as “the best place to be” in the current market environment. The intense trade tensions have undermined confidence in the US dollar and increased demand for alternative safe assets.
Adding to gold’s momentum are substantial central bank purchases and expectations for Federal Reserve monetary easing. Recent US data showing cooling inflation has led traders to anticipate three to four interest rate cuts through the remainder of the year, which typically benefits gold as it doesn’t pay interest.