Supported by safe-haven demand and a weaker dollar, gold prices rose to a record high on Wednesday. As of now, the price of gold is 3163.56.
Trump signed an executive order to establish a 10% "minimum benchmark tariff" for all countries, and will impose reciprocal tariffs, including 20% for the EU, 24% for Japan, 46% for Vietnam, and 25% for South Korea. The tariff exemption for goods that meet the US-Mexico-Canada Agreement will continue, and the tariff for those that do not meet the agreement will remain at 25%.
The US Treasury Secretary called on countries not to retaliate.
The base tariff will take effect on April 5, and the reciprocal tariff will take effect on the 9th. Another 25% automobile tariff will take effect on the 3rd, and the auto parts tariff will take effect on May 3rd.
Gold bars, copper, pharmaceuticals, semiconductors and wood products are also not subject to "reciprocal tariffs".
Market news: European Commission President von der Leyen will make a statement on US tariffs on Thursday morning local time.
Canadian Prime Minister Carney: We will take countermeasures to counter these US tariffs, and Canada will respond to US tariffs on Thursday.
Thai Ministry of Commerce: Plans to cut tariffs on US products.
South Korea's Ministry of Strategy and Finance: Will prepare a response strategy to minimize the negative impact of US tariffs.
Many countries have stated that they will take countermeasures against US tariffs.
The U.S. Treasury Secretary said that the Ukrainian delegation may arrive in the U.S. as early as this week.
The U.S. Treasury Secretary: All countries are advised not to take trade retaliation actions.
It is reported that Trump is seriously considering indirect nuclear negotiations with Iran.
Market concerns about the U.S. recession and global economic growth have triggered a gold boom and are likely to push gold prices further higher. In particular, after Trump announced the details of the reciprocal tariffs, the price of gold futures broke through the $3,200 mark. The increase in U.S. tariffs has led to increased pessimism about the U.S. economic outlook, and also strengthened expectations for the extent of the Fed's interest rate cuts this year. The interest rate market shows that the Fed may have room for 85-90 basis points of interest rate cuts by the end of the year, which is equivalent to four interest rate cuts, which is two more than expected on the latest dot plot. If this expectation of interest rate cuts is continuously priced in by the market, it is possible that gold futures prices will continue to rise.
Under the current situation, this may be a win-win situation for gold. If the Fed decides to keep interest rates stable, investors may become more worried because high borrowing costs may cause additional drag on the economy. Then they can buy more gold for hedging. On the other hand, accelerating the process of interest rate cuts may further reduce the opportunity cost of holding precious metals, which is another positive.
Technically, the current upward trend of spot gold remains intact and very strong. While tariffs could lead to a “sell the fact” market reaction, uncertainty over trade policy could allow gold bulls to re-enter the market around $3,067, a level that was broken out at the end of March. If so, a new rally in gold could once again target the all-time high near $3,150. A break above this high could extend the rally to the $3,200 area.
On the other hand, for the outlook to start turning bearish, gold would need to decisively break below the $3,000 round number. This would confirm lower daily lows and a break below the upward trend line from the December 30 low. This could happen if Trump ultimately acts more moderately than he has previously suggested.
We raise the peak price of gold in 2025 to $3,300, while silver may reach $44 in the same time period, and the gold-silver ratio will fall relatively mildly to 75, largely due to the overall strength of the metals. Gold continues to be driven by an increasingly uncertain geopolitical landscape, with global tensions and economic changes leading investors to seek safer assets, a trend that shows no signs of abating in the short term. Central banks' massive purchases of gold to diversify their holdings of assets such as the dollar and bonds, coupled with concerns about rising global debt, have prompted investors to turn to precious metals to hedge against economic instability. The market will remain focused on this issue in the coming months, and the market turmoil caused by tariffs may provide additional support for gold, while economic growth will slow and inflation may re-accelerate.
Independent metal trader TaiWong pointed out that the details of the reciprocal tariffs are much more severe than expected, which will lead to the selling of risk assets and the depreciation of the US dollar. But it is undoubtedly good news for the rise of gold. After setting a new record high today, the short-term target has been locked at $3,200. However, there are still many problems to be solved, and there is room for negotiation on many things. This uncertainty will make the market very unstable in the short term.
ZanerMetals senior strategist said that from a technical point of view, gold's new high means that it will soon attack $3,200 and lay the foundation for the future attack on $3,300, and give sufficient confidence to the bullish prospect of rising to $3,500 in the future.