Gold Pulls Back After Hitting Record High Amid Trade War Fears
Year-to-date, gold has gained approximately 12% and is now just over 2% away from reaching $3,000.
Gold prices surged to an all-time high on Wednesday as mounting concerns over an imminent trade war and global economic growth fueled safe-haven flows. This followed fresh tariff threats from U.S. President Donald Trump.
Spot gold edged down 0.03% to $2,934.39 after reaching a record high of $2,946.75 per ounce earlier in the session. Prices have now set a new record for the ninth time this year. Meanwhile, U.S. gold futures rose 0.06% to $2,950.74.
What’s Driving Gold’s Historic Rally?
Gold’s latest rally appears to be driven by President Trump’s recent remarks on upcoming tariffs on automobiles and pharmaceuticals, potentially paving the way for a push toward $3,000.
Since taking office, Trump has imposed a 10% tariff on Chinese imports and a 25% tariff on steel and aluminum. On Tuesday, he announced plans to introduce tariffs on automobiles, as well as similar levies on semiconductors and pharmaceutical imports.
Bullion is often viewed as a hedge against rising inflation and geopolitical uncertainty. However, higher interest rates tend to diminish the appeal of this non-yielding asset.
Other Precious Metals
Among other metals, spot silver—widely used in electrical components—rose 0.4% to $32.99 per ounce. Platinum, essential for automotive catalysts, fell 0.6% to $981.56, while palladium inched up 0.1% to $987.75.
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