Gold hits record high as investors seek safe haven amid tariff shock

WASHINGTON: Jittery investors flocked to safe-haven assets on Thursday and pushed gold to a record high after US President Donald Trump unleashed more aggressive-than-expected import tariffs, kicking into higher gear an already heated global trade war.

Spot gold was up 0.5 per cent at $3,148.05 an ounce as of 0325 GMT, after hitting an all-time high of $3,167.57 earlier in the session.

US gold futures firmed 0.2 per cent to $3,172.60.

On Wednesday, Trump unveiled a 10 per cent baseline tariff on all imports to the US and higher duties on dozens of countries, including some of the United States’ biggest trading partners, deepening a trade war that has rattled global markets and bewildered US allies.

Analysts believe that Trump’s aggressive policy stance will slow down US economic growth and stoke inflation.

“There are a few reasons why tariffs are supporting gold demand. One is the slowdown that tariffs are likely to cause the US economy, raising the prospects of future rate cuts,” Capital.com’s financial market analyst Kyle Rodda said.

The Trump administration confirmed that the 25 per cent global car and truck tariffs will take effect on April 3 as planned and duties on automotive parts imports will be launched on May 3.

Gold, traditionally seen as a hedge against political and financial instabilities, has surged over 19 per cent year-to-date, on the back of uncertainty around tariffs, potential for interest rate cuts, geopolitical conflicts, and central bank buying.

“There’s also some front running going on amongst traders who anticipate (Trump’s) policies will drive central banks to park their reserves in gold rather than US dollar-denominated assets,” Rodda said.

Meanwhile, US private payrolls increased more than expected in March, but that did not change economists’ views that the labour market was slowing against the backdrop of mounting economic uncertainty.

All eyes are on the US non-farm payrolls report due Friday for further clues into the Federal Reserve’s policy path.

Spot silver slipped 1.5 per cent to $33.52 an ounce, platinum fell 0.7 per cent to $977.17 and palladium lost 0.5 per cent to $965.14.

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