Gold prices continued to climb on Wednesday, following a record high reached the previous day, as investors turned to the precious metal for safety amid growing concerns over U.S. reciprocal tariffs.
As of 0240 GMT, spot gold rose by 0.7%, reaching $3,131.25 an ounce. On Tuesday, gold hit a historic peak of $3,148.88.
U.S. gold futures also saw a 0.4% increase, trading at $3,159.90.
“The surge in gold prices is driven by safe-haven buying, and the geopolitical uncertainty fueling this trend shows no sign of easing,” said Philip Newman, managing director of Metals Focus.
Newman suggested that a potential U.S. economic slowdown, a rise in inflation, and upcoming interest rate cuts could push gold to $3,300 in the coming months.
The market is bracing for new tariffs from the U.S., which are set to be imposed later today, a move President Donald Trump has referred to as “Liberation Day.” These tariffs could potentially increase inflation, slow economic growth, and exacerbate trade tensions.
Gold, known as a hedge against global instability and inflation, tends to perform well in low-interest-rate environments.
Although the White House confirmed that new tariffs would be imposed, it has not revealed details regarding their size or scope.
The rally in gold prices has been supported by strong central bank demand, expectations of interest rate cuts by the Federal Reserve, geopolitical tensions in the Middle East and Europe, and increasing investments in gold-backed exchange-traded funds (ETFs).
“A bull case scenario could see gold testing $3,400 per ounce within the next nine months,” said Aakash Doshi, global head of gold strategy at State Street Global Advisors.
The Federal Reserve remains concerned about the potential for job losses, but inflation driven by tariffs may limit their ability to respond effectively.
Markets are now awaiting the ADP employment report later today, followed by the non-farm payrolls data due on Friday.
Meanwhile, other precious metals also saw gains. Spot silver rose by 0.2%, reaching $33.82 an ounce, platinum increased by 0.8% to $987.66, and palladium advanced by 0.7%, trading at $990.45.
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