Gold Soars to All-Time High Amid Trade Tensions and Shift in US Interest Rates

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By Anjana Anil

On Friday, gold hit a record peak, fueled by uncertainties surrounding U.S. tariffs, escalating trade tensions, and increasing anticipation of the Federal Reserve’s plans for looser monetary policies.

Spot gold decreased by 0.1%, trading at $2,984.29 an ounce as of 05:22 AM GMT. During the session, haven-seeking bullion reached an all-time peak of $2,993.80 and stayed close to the significant threshold of $3,000.

Bullion is set for another week of gains, marking two weeks of increases, with a rise of 2.5% up to this point.

U.S. gold futures increased by 0.2% to reach $2,997.90.

"The cautious approach in the markets indicates that investors anticipate trade tensions will probably intensify further before easing, and they are once more seeking refuge in safe-haven assets like gold to protect their portfolios from increased volatility," explained IG Market Strategist Yeap Jun Rong.

The most recent chapter in US President Donald Trump’s multifaceted trade conflict saw the European Union hit back against broad-ranging US tariffs on steel and aluminum with a 50% duty on American whiskey exports. In retaliation, the president vowed via Truth Social to slap a 200% tariff on imported wines and spirits from Europe.

The potential psychological threshold at $3,000 per ounce is now on the horizon for gold prices. As we move through the second quarter, when counter-tariffs might spark further market volatility, gold continues to be an attractive haven asset amid limited alternative options, according to Rong.

Trump's tariffs are anticipated to boost inflation and create economic instability, leading to gold hitting several all-time peaks in 2025.

Gold serves as a safeguard against political uncertainties and rising prices.

Investors now await the Fed's monetary policy meeting, scheduled for Wednesday. The central bank is expected to keep its benchmark overnight interest rate in the 4.25%-4.50% range.

Persistent gold flourishes in a low-interest-rate setting.

On Thursday, Russian President Vladimir Putin stated that Russia generally backed a US suggestion for a truce in Ukraine; however, he requested several clarifications and stipulations which seemed likely to prevent an imminent cessation of hostilities.

Silver spot decreased slightly by 0.1% to reach $33.78 per ounce, platinum strengthened by 0.1% to hit $994.78, and palladium increased by 0.7% to stand at $964.97.

(Reported by Anjana Anil in Bengaluru; Edited by Rashmi Aich, Sherry Jacob-Phillips, and Krishna Chandra Eluri)

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