Gold Nears Record High as US Trade Policies Weigh on the Dollar
Gold prices approached a historic peak as the US dollar weakened, following President Donald Trump’s directive to explore new reciprocal tariffs on key trading partners.
Market Reactions to US Trade Measures
Trump’s latest move instructs the US Trade Representative and Commerce Secretary to evaluate and propose country-specific tariffs aimed at rebalancing trade relationships. This extensive review could take several weeks or months to finalize, raising concerns over potential global trade disruptions.
Gold rose by 0.8% to $2,927.17 per ounce, coming within $16 of its all-time high set earlier in the week. The continued rally in gold prices suggests increased demand for safe-haven assets, as investors assess the potential economic impact of the administration’s evolving trade and geopolitical strategies.
Factors Driving Gold’s Rally
One key driver behind gold’s surge is geopolitical uncertainty. On Wednesday, Trump and Russian President Vladimir Putin agreed to initiate talks on ending the conflict in Ukraine. This development strengthened the euro while putting pressure on the US dollar, contributing to gold’s gains.
Additionally, central banks—including China’s—have been increasing their gold reserves, further fueling demand. Meanwhile, gold-backed exchange-traded funds (ETFs) have also seen inflows, signaling strong investor interest.
Current Market Overview
As of 2:39 p.m. in New York, spot gold had risen 0.8% to $2,926.52 per ounce, while the Bloomberg Dollar Spot Index declined by 0.6%. Other precious metals also posted gains, with silver, platinum, and palladium moving higher.
Looking Ahead
With gold continuing its upward trajectory, analysts are watching closely for a potential test of the $3,000 per ounce threshold. The US administration’s stance on trade, central bank actions, and broader market trends will likely play a critical role in shaping the precious metals market in the coming weeks.
