Gold prices extended their record rally in Asian trading on Monday, surging past the US$3,100 mark as investors sought refuge in safe-haven assets amid escalating trade tensions.
The surge comes ahead of United States President Donald Trump’s so-called ‘Liberation Day’ on 2 April, when he is expected to announce sweeping new tariffs.
By 3:45 pm AEDT (4:45 am GMT) spot gold prices were up by $26.53 or 0.9% to fresh record highs of US$3,111.75 per ounce.
The Wall Street Journal reported that Trump’s administration may impose higher and broader reciprocal tariffs, stoking fears of a full-fledged global trade conflict.
The report noted that “advisers have considered imposing global tariffs of up to 20% that would hit virtually all US trading partners”.
The prospect of aggressive tariff measures sent risk assets tumbling, while gold, seen as a hedge against economic turmoil, continued to soar.
Markets are increasingly wary of potential stagflation in the U.S., with rising inflationary pressures coupled with slowing economic growth. This concern has weighed on the U.S. dollar and Treasury yields, further boosting demand for non-yielding gold.
Despite the bullish momentum, some traders may look to cash in on the rally ahead of Wednesday’s tariff announcement, which could trigger a temporary pullback.
Additionally, technical indicators suggest gold remains heavily overbought, adding to the potential for profit-taking.
