Gold price breaches $3,300 for the first time as tariff tensions rise

Gold has reached an unprecedented milestone by surpassing the $3,300 mark, setting a new record with an intraday high of $3,318 on April 16. This marks a 40% increase in the past year, driven by mounting uncertainty over US trade policies and a declining US Dollar, which have bolstered demand for safe-haven assets. The closing price today will reveal whether gold can sustain this historic level. The potential of further tariffs on critical mineral imports, as announced by President Donald Trump, has intensified trade tensions with China, impacting the gold market.

Investor sentiment has shifted as the US-China trade tensions create an uncertain economic environment. With concerns about global economic growth and a diminishing confidence in US Treasuries, investors are increasingly turning to gold.

Dr. Renisha Chainani, Head of Research at Augmont, highlights that "Gold prices have surged to an all-time high today, fueled by a lower dollar, trade war tensions, and concerns about global economic growth as a result of US President Donald Trump’s tariff plans, which prompted safe-haven inflows." Central banks' consistent gold purchases and inflows into gold-backed ETFs further support gold's upward trajectory.

The US's more aggressive trade posture, notably the possibility of a 245% tariff on Chinese imports, has strained relations and prompted a greater demand for gold. As the US Dollar continues to weaken and recession fears loom, gold is expected to maintain its bull run. The anticipated Federal Reserve rate cut later in 2025 could further boost gold prices. China's response to tariff hikes, emphasizing no desire for confrontation but a refusal to remain silent under US pressure, underscores the ongoing trade conflict's impact on the gold market. In India, gold prices are nearing the Rs 1 lakh mark, reflecting the metal's global upward trend.