Gold surged to an all-time high of $2,990.21 per ounce as investors sought safety amid concerns about U.S. economic growth, aggressive trade policies from former President Donald Trump, and weak inflation data. The metal’s rally was fueled by expectations of looser monetary policy, lower bond yields, and renewed fears of a broader economic slowdown.
The latest milestone in gold’s ascent follows stagnant wholesale inflation in February, signaling potential economic weakness and reinforcing the case for Federal Reserve rate cuts. With borrowing costs likely to decline, non-yielding assets like gold have become increasingly attractive.
Meanwhile, yields on 10- and 30-year U.S. Treasury bonds climbed, reflecting a surge in demand for government debt as investors reassessed economic prospects. The bond rally came amid a sharp downturn in equities, with the S&P 500 sliding into its first 10% correction in nearly two years, erasing roughly $5 trillion in market capitalization since its February peak.
Trump’s latest tariff threats, particularly his proposed 200% levy on European alcoholic beverages, have rattled markets further. His decision to maintain steel and aluminum tariffs, along with planned reciprocal tariffs on global trading partners set to take effect on April 2, has only deepened concerns about the global trade landscape.
Gold’s historic rally reflects mounting unease over the U.S. economy. The metal has long been viewed as a safe haven during times of financial and geopolitical stress, and recent developments have only bolstered its appeal.
“The latest inflation data, combined with Trump’s tariff moves, has heightened fears of an economic slowdown,” said John Hardy, head of FX strategy at Saxo Bank. “With stocks under pressure and the Fed expected to ease policy, gold is benefiting from both haven flows and a weaker dollar outlook.”
Gold’s rise has coincided with shifting expectations for Federal Reserve policy. February’s wholesale inflation data—which showed trade margins declining sharply—has increased bets that the Fed could pivot to rate cuts sooner than expected. Lower interest rates reduce the opportunity cost of holding gold, making it more attractive to investors.
As of 9:45 a.m. in Singapore, spot gold was trading at $2,988.09 per ounce, on track for a weekly gain of 2.7%. The Bloomberg Dollar Spot Index remained flat, signaling a pause in the greenback’s recent strength.
Silver edged lower, following a strong 5% rally earlier in the week.
Platinum and palladium rose, extending their recent gains amid supply concerns.
Meanwhile, bond yields climbed as investors shifted from riskier assets to Treasuries. The 10-year and 30-year Treasury yields reached their highest levels this month, reflecting strong demand for U.S. government debt despite economic concerns.
Stocks, however, continued to reel from recent turmoil. The S&P 500’s 10% correction marks its steepest decline in nearly two years, underscoring investor anxiety.
Trump’s decision to impose a 200% tariff on European wine, champagne, and other alcoholic beverages has sent shockwaves through global markets. The move, which could take effect in early April, is part of a broader push to force trading partners into more favorable terms.
The former president has also doubled down on his protectionist stance, refusing to lift tariffs on steel and aluminum that took effect this week. These measures, along with proposed reciprocal tariffs on key global partners, have raised fears of a full-blown trade war that could further rattle global supply chains and economic growth.
Markets have responded swiftly to Trump’s rhetoric. European stocks have stumbled, while the euro weakened against the dollar as investors assessed the potential impact on major European exporters.
Major banks are increasingly bullish on gold, predicting further gains in the coming months.
Macquarie Group has projected that gold could spike to $3,500 per ounce in the second quarter, citing Trump’s unpredictable trade policies and global economic uncertainty.
BNP Paribas SA has raised its outlook, forecasting that gold prices will average well above $3,000 per ounce for the rest of the year.
“Trump’s policies are injecting a significant level of uncertainty into global markets,” said Jim Steel, chief precious metals analyst at HSBC. “If the trade situation worsens and the Fed cuts rates, we could see gold surpassing $3,500 sooner than expected.”
Gold’s rally underscores the fragility of global markets. While a weaker dollar and lower interest rates continue to support the metal, much will depend on how policymakers respond to economic and trade developments.
With Trump’s tariffs escalating tensions with Europe, the Fed facing pressure to cut rates, and investors fleeing stocks, gold’s bull run could have further to go.
