Gold Hits Record High Above US$3,100/oz Amid Tariff Uncertainty

Gold prices maintained a remarkable rally on March 31, surpassing US$3,100/oz and setting a new record. Concerns over tariffs that could drive inflation and slow economic growth fueled demand for safe-haven assets, keeping gold on track for its strongest quarter since 1986.

On Monday, by 09:47 a.m. ET spot gold had risen 0.7% to US$3,103.9/oz after reaching an all-time high of US$3,128.06/oz earlier in the day. US gold futures also climbed 0.7% to US$3,136.10."The uncertainty surrounding tariffs has weighed on equity markets and driven another wave of safe-haven buying into gold," says David Meger, Director of Metals Trading, High Ridge Futures. 

Market attention is focused on Donald Trump's expected announcement of reciprocal tariffs on April 2, with additional automobile tariffs set to take effect on April 3. Trump has also indicated that he might impose secondary tariffs of 25%-50% on buyers of Russian oil if he believes Moscow is obstructing efforts to end the war in Ukraine.

Gold has gained approximately 18% this year after rising over 27% in 2024, driven by favorable monetary policies, significant central bank purchases, and strong exchange-traded fund (ETF) demand. Despite gold’s Relative Strength Index exceeding 77—indicating an overbought market—analysts believe the rally is defying conventional market expectations.

Major Wall Street banks have raised their gold price forecasts, citing trade tensions and sustained central bank demand. Goldman Sachs projects that under extreme market conditions, gold could exceed US$4,500/oz within the next year. "There are strong signs of Chinese buying activity influencing prices. Given the ongoing uncertainty surrounding President Trump's trade policies, we expect macro funds to continue increasing their gold holdings," says Daniel Ghali, Commodity Strategist, TD Securities.

Regarding other precious metals, spot silver fell 1.7% to US$33.53/oz, platinum declined 0.6% to US$977.90, and palladium edged up 0.2% to US$973.68. All three metals remained on track for monthly gains.