Gold prices extended their record-breaking rally on Tuesday, reaching an all-time high as investors sought safe-haven assets ahead of U.S. President Donald Trump’s anticipated announcement on reciprocal tariffs.
Spot gold rose 0.3% to $3,133.01 per ounce at 1147 GMT after hitting a record high of $3,148.88 earlier in the day. U.S. gold futures also climbed 0.4% to $3,161.60.
According to Adrian Ash, head of research at BullionVault, Trump’s tariff stance and his volatile approach toward Russia’s war against Ukraine have created the “perfect chaos” for gold prices to surge, even surpassing levels seen during the COVID-19 pandemic. Trump stated on Sunday that his new tariff policy would apply to all countries, not just those with the largest trade imbalances.
Gold’s rally has also been fueled by recession concerns. Goldman Sachs raised the probability of a U.S. recession to 35% from 20% on Monday and predicted further interest rate cuts by the Federal Reserve, a scenario that typically benefits non-yielding assets like gold.
Carsten Menke, an analyst at Julius Baer, attributed gold’s bull run to two main factors: rising central bank demand since 2022 and a renewed rush from Western investors seeking a safe haven in 2024. Additionally, geopolitical instability in the Middle East and Europe, along with increased investments in gold-backed exchange-traded funds, have further supported the rally.
Gold closed its strongest quarter since 1986 on Monday, surpassing $3,100 per ounce in one of the most significant price surges in its history. However, technical indicators suggest a possible correction, as gold’s Relative Strength Index (RSI) surpasses 70, indicating an overbought market.
“I expect a long-overdue correction before an eventual push toward our target of $3,300,” said Ole Hansen, head of commodity strategy at Saxo Bank. “A more serious correction would only occur if prices drop below $2,955.”
Investors now turn their attention to U.S. job openings data due later on Tuesday, as well as the non-farm payrolls report on Friday, which could influence future price movements.
Meanwhile, other precious metals saw mixed movements: silver fell 0.7% to $33.85 an ounce, platinum dipped 0.8% to $984.51, and palladium remained steady at $982.36.
