Gold Prices Reach New High Amid Trade Tensions
Gold surpasses $3,000 per ounce for the first time, driven by rising trade conflicts and inflation concerns.
Gold prices have reached a new record high, with the precious metal hitting $3,086.82 per ounce on March 28, 2025, amidst escalating trade tensions and a weakening U.S. dollar following the latest inflation data.
As of 14:50 GMT, the price of gold had increased by 0.45%, standing at $3,070.90 per ounce.
The surge in gold prices comes in the wake of announcements from U.S. President Donald Trump regarding the introduction of new tariffs aimed at 'all cars not made in the United States', following previously imposed tariffs on Chinese goods, steel, and aluminum.
Gold's appeal as a safe haven asset is attributed to its historical role in hedging against inflation.
Analysts highlight the ongoing conflict in Ukraine as a contributing factor to market uncertainties, alongside a notable increase in gold purchases by central banks seeking to bolster their reserves.
Despite the rising gold prices, the response in the foreign exchange market has been described as 'curiously muted', according to Stephen Innes of SPI AM. Innes notes that the market appears to regard Trump's tariff announcements with skepticism, positing that these tariffs could be more temporary than indicative of a sustainable policy shift.
Concurrently, the U.S. dollar weakened following the release of the Personal Consumption Expenditures (PCE) inflation index for February, which serves as a preferred measure of inflation for the Federal Reserve.
The annual inflation rate remained steady at 2.5%, aligning with analysts' expectations, while core inflation, which excludes volatile food and energy prices, registered at 2.8%, slightly higher than anticipated.
Typically, higher inflation would strengthen the dollar; however, Fawad Razaqzada of StoneX indicates that the dollar is currently 'under pressure'.
He cites weakening survey data from the U.S. as contributing to expectations of an earlier-than-anticipated rate cut by the Federal Reserve, raising concerns about potential stagflation—characterized by sluggish economic growth coupled with high inflation.
As a result, the dollar fell by 0.21% against the euro, trading at approximately $1.0825.
As of 14:50 GMT, the price of gold had increased by 0.45%, standing at $3,070.90 per ounce.
The surge in gold prices comes in the wake of announcements from U.S. President Donald Trump regarding the introduction of new tariffs aimed at 'all cars not made in the United States', following previously imposed tariffs on Chinese goods, steel, and aluminum.
Gold's appeal as a safe haven asset is attributed to its historical role in hedging against inflation.
Analysts highlight the ongoing conflict in Ukraine as a contributing factor to market uncertainties, alongside a notable increase in gold purchases by central banks seeking to bolster their reserves.
Despite the rising gold prices, the response in the foreign exchange market has been described as 'curiously muted', according to Stephen Innes of SPI AM. Innes notes that the market appears to regard Trump's tariff announcements with skepticism, positing that these tariffs could be more temporary than indicative of a sustainable policy shift.
Concurrently, the U.S. dollar weakened following the release of the Personal Consumption Expenditures (PCE) inflation index for February, which serves as a preferred measure of inflation for the Federal Reserve.
The annual inflation rate remained steady at 2.5%, aligning with analysts' expectations, while core inflation, which excludes volatile food and energy prices, registered at 2.8%, slightly higher than anticipated.
Typically, higher inflation would strengthen the dollar; however, Fawad Razaqzada of StoneX indicates that the dollar is currently 'under pressure'.
He cites weakening survey data from the U.S. as contributing to expectations of an earlier-than-anticipated rate cut by the Federal Reserve, raising concerns about potential stagflation—characterized by sluggish economic growth coupled with high inflation.
As a result, the dollar fell by 0.21% against the euro, trading at approximately $1.0825.
