Keypoints:
- Gold jumps past $3,200 amid trade fears
- Weaker dollar and recession jitters boost demand
- Analysts see gold rally extending to $3,500
GOLD prices soared to a fresh record on Friday, crossing the $3,200 mark as fears of a global recession deepened and the US-China trade war escalated. The spike was fuelled by a weaker dollar and growing investor demand for safe-haven assets.
At 1211 GMT, spot gold was up 1.4 percent at $3,217.15 per ounce, after touching a new high of $3,237.56 earlier in the session. US gold futures also climbed 1.8 percent, reaching $3,234.90.
According to Reuters, bullion has gained nearly 6 percent this week alone, continuing a powerful rally that has pushed prices up almost 21 percent since the start of 2025.
Trade war sparks market turmoil
The gold surge followed Beijing’s announcement that it would raise tariffs on US imports to 125 percent, a retaliatory move against President Donald Trump’s decision to hike duties on Chinese goods to 145 percent. The tit-for-tat escalation sent shockwaves through global markets, rattling investor confidence and pushing many toward gold.
As global equities tumbled and the US dollar weakened, gold’s appeal as a crisis hedge strengthened. A weaker dollar typically makes dollar-priced gold more affordable for buyers using other currencies, amplifying demand.
‘Recession risks are mounting, bond yields are soaring, and the US dollar continues to weaken – all factors reinforcing gold’s role as a crisis hedge and inflation shield,’ said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany, speaking to Reuters.
Central bank demand, ETF flows drive rally
Beyond geopolitical tension, the sustained rally in gold has been underpinned by strong demand from central banks, increasing investment in gold-backed exchange-traded funds (ETFs), and inflation uncertainty.
Giovanni Staunovo, analyst at UBS, told Reuters that the rally may have more room to run.
‘We believe gold has further to run — in the upside case, we target USD 3,400–3,500/oz over the months ahead,’ he said.
Recent data also showed US consumer prices fell unexpectedly in March, further fuelling speculation that the Federal Reserve could resume interest rate cuts as early as June. Markets are now pricing in a full percentage point cut by year-end, a move that typically boosts gold prices by lowering the opportunity cost of holding non-yielding assets.
Broader precious metals market moves
Other precious metals followed gold’s upward momentum, though not as dramatically. Spot silver rose 0.9 percent to $31.46 per ounce. Palladium gained 1.6 percent to $922.68, while platinum slipped 0.4 percent to $934.60.
The sustained strength in gold comes amid mounting global economic uncertainty, with trade disruptions, inflation concerns, and shifting central bank policies contributing to a complex market environment.
Jewellery demand remains strong, particularly in markets such as the UAE, where gold continues to be a staple investment and cultural symbol.
