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Safe-haven demand pushes gold higher and higher
The gold (XAU) price surged by 1.22% on Thursday and set a new all-time high. Investors fled to the safe-haven asset amidst rising global trade tensions and falling equity markets triggered by U.S. President Donald Trump's new auto tariffs.
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Possible effects for traders
Donald Trump announced that the U.S. will impose an additional 25% tariff on imports of vehicles starting at 4:01 a.m. UTC on 3 April. Other countries—specifically Canada and France—immediately threatened to retaliate. 'We will fight the U.S. tariffs with retaliatory trade actions of our own that will have maximum impact in the United States and minimum impacts here in Canada', Canadian Prime Minister Mark Carney said at a news conference. Eric Lombard, French Finance Minister, called Trump's plan 'very bad news', and said the only solution was for the European Union (EU) to raise its own tariffs. In response, Trump said he might hit the EU and Canada with larger tariffs if they teamed up to retaliate.
Overall, global trade tensions are rising rapidly. Investors turn to gold as a traditional safe-haven asset, seeking to mitigate the potential risks associated with volatile equity markets and global macroeconomic uncertainty. Thus, the gold price rises towards new heights as investors prioritise capital preservation over higher-risk investments. 'Looks like we're going to see gold futures hit $3,100 here shortly, and the main catalyst is safe-haven buying', said Bob Haberkorn, senior market strategist at RJO Futures. Goldman Sachs, a major investment bank, raised its end-2025 gold price forecast towards $3,300, up from $3,100. The main drivers for the rise are stronger-than-expected inflows into exchange-traded funds (ETFs) and sustained central bank demand.
XAUUSD continued to rise during the Asian and early European trading sessions, hitting another all-time high. Investors are now awaiting the U.S. Personal Consumption Expenditures (PCE) data due at 12:30 p.m. UTC to get clues on the Federal Reserve's (Fed) further actions. However, any news around trade tariffs will likely overshadow official inflation statistics. XAUUSD remains in a very strong bullish trend, with traders now targeting $3,096 and $3,114.
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