Gold Reaches All-Time High Amid Inflation Fears

Gold prices saw a significant increase on April 1, 2025, reaching an unprecedented peak. The rise in prices was largely driven by concerns that the reciprocal tariffs from the U.S. government could lead to inflation and slow down economic growth, triggering a surge in demand for gold as a safe haven.

As of 0310 GMT, spot gold climbed by 0.6% to $3,142.83 an ounce, previously touching an all-time high of $3,145.38 during the trading session. U.S. gold futures followed suit, rising 0.7% to $3,171.80.

In the previous quarter, gold experienced one of its best performances since 1986, highlighting the unusual demand for the precious metal amidst economic uncertainties.

Market experts, including IG market strategist Yeap Jun Rong, noted that the anticipation surrounding the upcoming tariffs announced by U.S. President Donald Trump has caused traders to adopt a defensive approach. Many are opting for gold to shield their investments against potential market volatility.

“While short-term technical indicators may indicate an overreach, the ongoing uncertainty about tariffs is likely to keep gold prices buoyant, with market watchers eyeing a potential return to the $3,200 level,” said Yeap.

President Trump, who promotes tariffs as a strategy to protect the domestic market from unfair international competition, is expected to unveil a comprehensive tariff plan dubbed “Liberation Day” on Wednesday. These tariffs will impact all countries.

Additionally, the market is closely observing automobile tariffs set to take effect on April 3, which could also influence economic conditions.

Gold is viewed as a protective asset against geopolitical and economic disturbances, thriving especially in an environment of low interest rates. New York Federal Reserve President John Williams emphasized the importance of maintaining the current interest rates “for some time” to assess incoming economic data before making further decisions.

This week, important U.S. economic indicators will be released, including job openings, the ADP employment report, and the non-farm payrolls report, which could provide insights into the Federal Reserve's strategy regarding interest rates.

Other precious metals also saw movement: spot silver rose 0.2% to $34.13 an ounce, platinum remained stable at $992.70, and palladium increased by 0.8% to $990.34.

gold, inflation, economy