Gold Prices Hit All Time High Fuelled By Tariffs: What Do Experts Say?

The imposition of Tariffs by the United States President Donald Trump has driven gold prices higher, making the safe-haven metal hit an all-time high of $3,080.

Gold has been on track for four weeks consecutively and has had its largest monthly rise since last year. The yellow-metal has recorded an intra-day high of $3,086 on Friday.

As gold has achieved a new milestone, buyers are jumping in, putting a test of $3,100 in the near term.

On the other hand, some buyers are also avoiding risk by buying more gold amid rising trade tensions as the world awaits the implications of US tariffs on April 2, 2025, with baited breath. This is a primary factor in driving gold sales.

What Do Experts Say?

About two weeks ago when gold rallied 14-15% in India, and market expert Chandan Taparia of Motilal Oswal said that in the last one year there has been a rally of 31% along with a strong accumulation of the yellow metal by the central bank. Additionally, he added that Trump's policy stance is the reason behind the market shifting from riskier assets to safe assets.

Additionally, financial expert Kishore Subramanian said, “with regards to gold prices, risk aversion is the primary reason for why gold prices are going up. Gold is always considered as a safe-haven and in times of uncertainty, global turmoil, stock market dip and specifically the US stock market is coming down, there is an anticipation that US might enter a recessionary phase and more likely than not that this will happen.”

He added that international gold prices have been on a high for a very long time saying, “there is no significant upside move that I see as far as gold prices are seen from here on.”

“Though if global trade war or geopolitical tensions go up, then maybe gold prices will go north by 7%. But I don't see gold as an alternative avenue because the inflationary pressure due to the trade war that is going up will slowly start showing up," he said.

As far as the correlation between gold prices and the stock market is concerned he said that he thinks gold will be muted for some time but the immediate rise in the price is a response to the tariff and the trade war anticipation in the global markets.

What Are Some Other Factors?

Additionally, the European Union and Canada threatened retaliation after President Donald Trump's decision of slapping 25% tariffs on vehicles and auto imports. This has raised concerns of a wider trade war and its consequences on the world economy.

Inflation Or PCE?

The Federal Reserve typically chooses the Personal Consumption Index (PCE) or the price index as the measure of inflation, which is an economic indicator responsible for tracking changes in the costs of goods and services that American consumers buy. The latest PCE report is expected today.

Recently, the Fed has also raised its inflation forecast in the middle of concerns of tariffs and their impact.

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