Gold prices surged by more than one per cent on Thursday as the investors flocked to the bullion after the United States hiked tariffs on China.
According to Reuters, spot gold was worth $3,119.18 per ounce at 3 am (GMT). It recorded its best day since October 2023, while American gold futures climbed 1.8 per cent to $3,135.50.
Trump hiked duties on China to 125%
Trump hiked duties on China to 125%, effective immediately, after the Asian country announced plans to retaliate with an 84% tariff to start Thursday.
However, Trump decided to temporarily lower the hefty duties he recently imposed on several countries.
“If we enter a slow growth period, which is our base case, we think rates will eventually head lower and push gold higher since inflation worries will still be with us for much of the year due to tariff impacts,” Marex analyst Edward Meir told Reuters.
“Eventually we do see $3,200 possibly by month-end, if not earlier.”
Gold, considered a hedge against global uncertainties and inflation, has risen more than 18% in 2025, driven largely by Trump’s tariff plans, expectations of interest rate cuts by the Federal Reserve, geopolitical tensions in the Middle East and Ukraine, strong central bank buying, and increased investments in gold-backed exchange-traded funds.
According to minutes from the Fed’s latest meeting, policymakers were nearly unanimous last month in warning that the US economy faced risks of higher inflation alongside slower growth, with some noting “difficult tradeoffs” may lie ahead.
“We remain quite positive for gold,” Dominic Schnider, head of commodities and Asia Pacific currencies at UBS Global Wealth Management, told Bloomberg.
“The next step is going to be, at some point, the Fed coming in — and that gives the next leg up for gold,” he added.