Gold prices hit record high amid tariff and trade tensions
What's the story
Gold prices hit a new peak on Friday as demand for safe-haven assets surged amid fears of US tariffs and trade tensions. The yellow metal's appeal was further supported by expectations of stable monetary policy by the US Federal Reserve. Spot gold eased 0.1% to $2,983.78 per ounce today, after hitting an all-time high of $2,990.09 earlier in the session, nearing the crucial $3,000 mark.
Market overview
Gold's global performance and domestic market status
The gold market is set for a second consecutive weekly rise, gaining 2.5% so far. US gold futures rose marginally by 0.2% to $2,996.70 per ounce. In the domestic market, the Indian stock and commodity markets remain closed today on account of Holi 2025 celebrations. MCX gold prices, however, ended flat at ₹87,775 per 10g on Thursday while silver prices eased by ₹95 or 0.09%, closing at ₹1,00,450 per kg.
Inflation concerns
US-China trade tensions and gold prices
US President Donald Trump's trade war has ignited fears of inflation and a possible recession in the world's largest economy. This has resulted in several record highs for gold in 2025 as it's viewed as a hedge against political risks and inflation. The EU retaliated to US tariffs on steel and aluminum by slapping a 50% tax on American whiskey exports, prompting Trump to threaten a 200% tariff on imports of European wines and spirits.
Fed policy
Market anticipation of US Federal Reserve's monetary policy meeting
Market participants are now awaiting the US Federal Reserve's monetary policy meeting next Wednesday. The central bank is expected to hold its benchmark overnight interest rate in the 4.25%-4.50% range, which could further boost gold prices as non-yielding bullion thrives in a low-interest-rate environment. This comes amid ongoing global trade tensions and inflation fears, making gold an attractive investment option for many investors.