Gold reaches record high as latest trade tariffs bring ‘high level of uncertainty’

The price of gold hit an all-time high this week as demand surges amid unprecedented economic uncertainty over the impact of a global trade war

It reached a record $3,005 per ounce during Asian trading hours yesterday, with prices having risen by 14 per cent since the start of the year.

The escalating trade war between the United States and many of its largest trading partners has unsettled financial markets and raised concerns about the impact on economies and consumers across the world.

According to the Organisation for Economic Co-operation and Development (OECD), President Donald Trump’s new tariffs are likely to hit world growth and raise inflation.

Canada and Mexico are forecast to see the biggest impact, with the latter expected to enter a recession.

But the tariffs are also predicted to affect the U.S too. Growth has been downgraded from 2.4 per cent in 2024 to 2.2 per cent in 2025.

Growth in the US has also been downgraded, with growth of 2.2% expected this year and 1.6% in 2026, down from previous forecasts of 2.4% and 2.1%

In response, Canada, China, and the EU have all announced retaliatory tariffs.

When tariffs are imposed on goods, businesses face extra costs, which could be passed on through the price tags of the products sold to consumers – increasing the cost of living.

Gold is seen as a safer asset, or “safe haven”, for investors and is often sought-after in times of economic instability and potential future crises.

In its March Interim Report, the OECD said: “The high level of geopolitical and policy uncertainty at present brings with it substantial risks to the baseline projections. One possible risk is the escalation of trade restrictive measures.

“An illustrative exercise, where bilateral tariffs are raised further on all non-commodity imports into the United States with corresponding increases in tariffs applied to non-commodity imports from the United States in all other countries, shows that global output could fall by around 0.3% by the third year, and global inflation could rise by 0.4 percentage points per annum on average over the first three years.

“The impact of these shocks would be magnified if policy uncertainty were to increase further or there was widespread risk repricing in financial markets. These would add to the downward pressures on corporate and household spending around the world. “

The hike in gold prices also follows the U.S’ commitment this week to striking Yemen’s Houthis until they halt attacks on Red Sea shipping.

Trump warned on Monday that he would hold Iran accountable for any attacks by the Houthi group it supports in Yemen.

The administration has since expanded the largest U.S military operation in the Middle East since the President returned to office.

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