Gold rallies as Trump’s tariff plans fuel economic jitters

Onome Amuge

Global trade tensions heated up on Thursday, pushing gold prices higher as the U.S ratcheted up pressure on the global economy with new auto tariffs and a looming April 2 deadline for reciprocal tariffs from the world’s largest economy.

Spot gold rallied by 0.3 percent to reach $3,028.65 an ounce, mirroring the upward trajectory of US gold futures, which gained 0.5 percent to $3,036.10.

The gold market’s rise was triggered by President Donald Trump’s imposition of a 25 percent tariff on imported cars and light trucks, effective next week, escalating the global trade war and amplifying concerns over the potential economic damage of protectionist policies.

Fears over the damaging effects of Trump’s reciprocal tariff policies—expected to take effect from April 2—caused investors to flock to gold, which hit an all-time high of $3,057.21 on March 20, as the market reacted to growing concerns over rising inflation, reduced economic growth, and mounting trade tensions.

According to Aakash Doshi, the global head of gold at SPDR ETF Strategy, the precious metal is expected to surpass $3,100 in the second quarter of 2025, with a potential 8%-10 percent surge by year-end if the current economic environment and physical market conditions persist.

Goldman Sachs revised its forecast for the gold price at the end of 2025 to $3,300 per ounce, up from its previous estimate of $3,100, citing the robust demand for gold-based ETFs and the enduring interest in the precious metal by central banks.

With gold prices riding on shifting tides of economic uncertainty, investors anxiously await the release of the US personal consumption expenditures (PCE) data on Friday, which is expected to provide valuable insights into the Federal Reserve’s plans for interest rates.

Last week, the Federal Reserve maintained the benchmark interest rate at current levels, but the policymakers signaled that a rate cut could be on the horizon before the end of 2025, amid mounting concerns over the state of the US economy.

In the wider precious metals market, spot silver held steady, rising by 0.1 percent to $33.73 an ounce, while platinum declined by 0.4 percent, trading at $970.34 an ounce. Palladium also slipped by 0.5 percent, settling at $963.03 an ounce.