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Record Highs: Gold Price Rises to $3,170, Marking the 19th Increase This Year Amid Tariff Fears

After a rapid 210-day increase from $2,500 to $3,000 per ounce and a 19% year-to-date gain, investors are securing profits ahead of President Trump’s April 2 tariff move, with central banks and market momentum further fueling gold’s reputation as a safe investment.

April 2, 2025

Summary

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Gold futures reached a 19th record high this year, briefly exceeding $3,170 before investors took profits ahead of President Trump’s April 2 tariff announcement.
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Analysts from JPMorgan, Societe Generale, and Goldman Sachs cite momentum trading, strong central bank buying, and a weakening U.S. dollar as key drivers behind the surge.
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Record central bank gold purchases, along with significant increased investment in gold ETFs, have reinforced gold’s appeal as a safe haven amid economic and geopolitical challenges.
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Gold's past performance and low correlation with other asset classes continue to attract investors seeking diversification.
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Factors such as rising U.S. federal debt, tepid retail sales, and weak manufacturing data in New York have put additional downward pressure on the dollar, further enhancing gold’s status as a store of value.

Investors are counting on gold as a reliable way to protect investments in today’s unpredictable markets. Earlier this year, prices edged past $3,000 per ounce, reinforcing gold’s status as both a safe haven and a key part of diversified portfolios.

On Tuesday, gold futures hit their highest value on record for the 19th time this year, briefly spiking above $3,170 before investors decided to lock in profits ahead of President Trump’s tariff announcement on April 2. The announcement, designed to help American businesses through reciprocal duties, spurred many to take swift action. Analysts at JPMorgan, a major investment bank, argue that buying gold now is a smart way to hedge in these unstable times, especially with robust market indicators supporting further gains.

The surge has been impressive: in just 210 days, gold jumped from $2,500 to $3,000 per ounce—a dramatic leap compared to the historical average of over 1,700 days. Year-to-date, the metal has gained 19%, and over the past year, it increased by more than 40%. Societe Generale attributes this climb largely to market trend rather than classic supply-and-demand forces—a trend they believe will persist until market signals change. Meanwhile, Goldman Sachs has raised its year-end target to $3,300 per ounce, buoyed by healthy investment in gold ETFs and strong central bank buying, though caution remains due to potential unexpected global events.

Economic data further bolster gold’s appeal. Weak U.S. retail sales in February and a drop in New York’s Empire State Manufacturing Index to the lowest in 14 months have put pressure on the U.S. dollar. The U.S. Dollar Index decreased to 102.85. Combined with a staggering federal debt of over $34 trillion, these factors highlight the importance of fiscal responsibility and add to gold’s reputation as a trusted store of value.

Central bank actions have also played a significant role. After years of hesitance, net gold purchases hit a record 1,082 tonnes in 2022—more than double the decade’s average. The momentum continued with 1,037 tonnes purchased in 2023. Notably, China’s central bank re-entered the gold market in November, marking a clear step away from reliance on the dollar. Today, over 80% of global monetary authorities are positioned to boost their gold holdings in light of growing geopolitical risks and waning confidence in fiat currencies.

Gold’s resilience truly shines during market downturns. When global equities fell by 19.46% and bonds dropped 16%, gold’s modest gains provided a cushion for portfolios, thanks to its historically low—and sometimes even negative—correlation with other asset classes.

Geopolitical tensions and looming tariff uncertainties further enhance gold’s appeal. Recent safe-haven buying, driven by events like the Israel-Hamas conflict and ongoing concerns about tariff policies, has nudged prices to about $3,015 per ounce.

With recession worries mounting and caution prevailing over tightening monetary policies and consumer spending, the economic landscape remains fragile. These pressures, along with the threat of tariff retaliations, reinforce gold’s role as a reliable hedge against inflation and economic slowdown.

Market indicators offer a positive outlook, with key measures above average and strong support around the $3,000 level. Analysts are now eyeing short-term targets near $3,015, with further gains potentially stretching between $3,035 and $3,050, even if occasional pullbacks occur.

Meanwhile, other commodities like copper and aluminum have lagged behind, with copper trading around $9,855 per metric ton and aluminum roughly $2,627.50 per ton. This contrast highlights the market’s clear preference for stable assets such as gold, which continue to deliver resilience amid stock market volatility and trade disruptions.

In summary, gold’s historic ascent is powered by a combination of economic uncertainty, proactive moves by central banks, strong market trend, and ongoing geopolitical risks. For both institutional and retail investors, gold remains an invaluable asset for safeguarding and diversifying wealth in these challenging times.