Gold Prices Surge to All-Time High Amid Global Turmoil
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Synopsis
Gold prices have surged over 6.5% this week, hitting a record high of $3,237 per troy ounce amid growing global economic uncertainty and tensions from new US tariffs. Demand from individual and institutional investors, as well as central banks, is increasing, with projections for gold prices rising significantly.
Key Takeaways
- Gold prices hit a record high of $3,237.
- Increase of over 6.5 percent this week.
- US dollar at a three-year low against the euro.
- China imposes 125 percent tariff on US imports.
- Institutional demand for gold-backed ETFs is rising.
New Delhi, April 13 (NationPress) Gold prices soared by over 6.5 percent this week, achieving a historic peak of $3,237 per troy ounce.
This represents the metal's most robust weekly performance since the onset of the Covid-19 pandemic, as global investors respond to increasing economic uncertainty triggered by a fresh round of US tariffs implemented by President Donald Trump.
The significant increase in gold prices aligns with a sell-off in traditional safe-haven assets such as US stocks and Treasury bonds.
Concurrently, the US dollar has considerably weakened, falling to a three-year low against the euro, making gold a more appealing option for investors seeking stability.
Tensions escalated further on Friday when China retaliated to the US tariffs by imposing a 125 percent tariff on American imports.
This action has heightened fears of a potential trade war, prompting investors to turn to gold—an asset known for its resilience during periods of economic and geopolitical turmoil.
Market analysts suggest that worries about recession risks, rising bond yields, and overall financial instability are driving investors to seek refuge in gold.
In addition to individual investors, the demand from institutions and central banks is also on the rise. Gold-backed exchange-traded funds (ETFs) recorded their largest inflows since 2020 in the first quarter of this year.
Central banks, particularly in emerging markets, are increasingly purchasing gold to mitigate their dependence on the dollar.
In China, the domestic demand has surged to such an extent that buyers are willing to pay a premium over global gold prices—indicative of rising concerns about financial instability in Asian markets.
In line with the shift in market sentiment, the global financial services firm Union Bank of Switzerland (UBS) has revised its 12-month gold price forecast upward to $3,500 per ounce.
This marks the second upward revision by the bank this year, illustrating the rapid changes in the investment landscape.
As skepticism regarding Trump's aggressive trade policies continues to mount, experts predict that investors will likely continue to increase their investments in gold in the forthcoming months.
