Gold hits all-time high: is Trump's trade policy to blame?

Gold prices surged to an all-time high on Tuesday, fueled by growing anxieties that US President Donald Trump's planned reciprocal tariffs will trigger inflationary pressures and hinder global economic growth.

The move reflects a flight to safety as investors seek refuge from mounting uncertainty.

As of 0310 GMT, spot gold was trading up 0.6% at $3,142.83 an ounce, after hitting a record high of $3,145.38 earlier in the session. US gold futures also climbed, rising 0.7% to $3,171.80.

This rally follows a remarkable performance in the previous quarter, where bullion recorded its strongest gains since 1986, marking a significant upswing in the precious metal's fortunes.

"The anticipation of the April 2 US reciprocal tariffs has led market participants to lean towards a defensive stance, with some de-risking and turning to safe-haven gold as a hedge against impending portfolio volatility," explained IG market strategist Yeap Jun Rong.

While technical indicators may suggest that gold is overbought in the near term, the uncertainty surrounding Trump's "Liberation Day" tariff announcement is likely to sustain its upward trajectory.

Buyers appear to be targeting a retest of the $3,200 level, Rong added.

Trump, who views tariffs as a tool to protect the domestic economy from unfair global competition, has promised to unveil a sweeping tariff plan on Wednesday.

These reciprocal tariffs are expected to affect all nations.

Markets are also closely watching the impending automobile tariffs, set to take effect on April 3.

Gold's safe-haven appeal: thriving in a low-rate environment

Gold, traditionally viewed as a safe haven during times of geopolitical and economic turmoil, tends to flourish in a low-interest-rate environment.

New York Federal Reserve President John Williams recently stated that maintaining current interest rate levels "for some time" will allow officials to carefully analyze incoming data and determine the appropriate course of action.

This week's US economic data, including job openings, the ADP employment report, and the non-farm payrolls report, could provide valuable insights into the Federal Reserve's future rate-cut strategy.

Spot silver edged up 0.2% to $34.13 an ounce, while platinum remained flat at $992.70. Palladium experienced a more significant gain, rising 0.8% to $990.34.