2025-04-10T17:41:23.000Z

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On Thursday, the precious metal gold reached unprecedented heights, hitting a new record as the value of the US dollar took a downturn. Investors are increasingly focusing on the intensifying trade war between the United States and China, which has created a climate of uncertainty in the financial markets.

Gold futures (GC=F) experienced a significant surge, climbing as much as 3% and reaching an intraday peak of $3,193 per ounce before moderating slightly as traders evaluated the latest developments surrounding President Trump's tariff policies. The volatility reflects broader market anxieties about the ongoing trade conflict and its implications for the global economy.

On the same day, the White House confirmed that the recently implemented tariffs on a range of Chinese goods have increased to a staggering 145%, contrary to the previous figure of 125%. This adjustment comes in the wake of Trump's announcement on Wednesday, where he indicated a temporary pause on reciprocal tariffs for most US trading partners while simultaneously intensifying levies against China. This decision has raised eyebrows and heightened concerns among market analysts and investors alike.

Michael Brown, a senior research strategist at Pepperstone, commented on the situation in a note released early Thursday morning. He expressed concern over the chaotic and inconsistent nature of policy decisions being made by the administration, stating, Firstly, policy continues to be made in an utterly random and incoherent nature. This continued incoherence, I guess, should also help keep the bull case for gold relatively solid too.

Year-to-date, gold futures have risen by over 20%, achieving several all-time highs along the way. This rally is largely attributed to a backdrop of trade uncertainty and growing expectations that the Federal Reserve will implement interest rate cuts before the year concludes.

Moreover, fears surrounding a potential recession or stagflationcharacterized by sluggish economic growth coupled with high inflationhave further propelled demand for gold. Paul Wong, a market strategist at Sprott, highlighted this phenomenon in a recent analysis, stating, Persistent tariffs and policy unpredictability continue to elevate the risk of stagflation, further increasing the demand for gold as the best safe-haven asset.

Wong also posited that gold prices could continue to climb, driven by ongoing weakness in the US dollar, further geopolitical escalations, or even a crisis of confidence in US governance itself. This outlook reflects a growing sentiment among investors that gold remains a reliable hedge against economic instability.

As the demand for gold rises, central banks worldwide have accelerated their purchases, leading to increased inflows into physical gold-backed exchange-traded funds (ETFs). This trend underscores the widespread recognition of gold's status as a safe-haven asset in turbulent times.

For those eager to dive deeper into the intricacies of the stock market and the factors influencing stock prices, Yahoo Finance offers comprehensive analyses and updates.

Ines Ferre serves as a Senior Business Reporter for Yahoo Finance. You can follow her insights and updates on X at @ines_ferre.

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