Gold hits all time high

(MENAFN) Gold prices hit an all-time high on Thursday as investors, wary of rising global trade war fears, sought safe-haven assets. This surge coincided with the ongoing trade tensions, including the US's imposition of steel and aluminum tariffs, which took effect on Wednesday. These tariffs, introduced by US President Donald Trump, sparked immediate retaliatory actions from the EU and Canada. Prior to the tariffs, Trump threatened to raise the levy on Canadian metals to 50%, but reversed the decision after Ontario Premier Doug Ford blocked a 25% surcharge on electricity exports to several US states.

Gold futures for April delivery briefly peaked at $3,003.90 per ounce on the Chicago Mercantile Exchange (CME) before settling back to $2,989.50, marking the first time prices crossed the significant $3,000 threshold. Prices have surged nearly 14% this year, following a 27% increase in 2024.

Market analysts, including IG strategist Yeap Jun Rong, attribute this rally to the growing risk of worsening trade tensions, prompting investors to seek gold as a hedge against potential portfolio volatility. In addition to trade concerns, the rally is also fueled by expectations that the US Federal Reserve will ease monetary policy, with interest rates expected to remain in the 4.25%-4.50% range at next week's meeting.

Gold's rise in 2024, which saw it hit record highs 40 times, is also linked to geopolitical instability, uncertainties surrounding the US presidential elections, interest rate cuts, and central banks’ active gold purchases. TD Securities’ Bart Melek noted that central banks have been increasing their gold holdings due to concerns over the US dollar’s purchasing power and rising geopolitical tensions.

MENAFN15032025000045015687ID1109317978