Gold prices rose to an all-time high on Thursday, reaching $2,953.96 an ounce, as traders reacted to new tariff threats from U.S. President Donald Trump. Demand for safe haven rose after Trump confirmed that 25% tariffs on cars, pharmaceuticals and semiconductors would take effect within a month. It also raised the possibility of the same tax on all timber imports, raising fears of escalating trade tensions.
The Trump’s latest tariffs add to a series of measures targeting key trading partners, including the recent 10% tariff on China that prompted Beijing to retaliate.
Although a trade deal with China is still signaled, Trump’s increasingly aggressive stance has destabilized markets, pushing investors toward assets such as gold and the Japanese yen.
Gold briefly lost momentum on Wednesday as the U.S. dollar rose, following hawkish signals from the Federal Reserve’s January meeting. Policymakers have expressed concern about persistent inflation, noting that interest rate cuts may not come as soon as markets had hoped. Some officials have also warned that Trump’s trade policies could increase inflationary pressures, making the Fed more reluctant to ease policy.
Even with the dollar’s short-term strength, demand for gold remains high as uncertainty about U.S. economic policy continues to dominate sentiment. The metal has been on a steady rally in recent months, as traders closely monitor further developments in the tariff dispute and the Fed’s stance on interest rates. Persistent inflation risks, potential trade policy shocks, and liquidity concerns could lead to volatility in the stock and bond markets.
Gold prices record historic highs in global markets
Gold prices recorded historic highs for the third consecutive day in the global and local markets. In the global bullion market, the price of an ounce of gold rose by $9, to $2,953.
On the other hand, the price of gold per tola rose by 1,000 rupees, reaching 309,000 rupees in the local market. Similarly, the price of 10 grams has increased by Rest 857, now reaching Rs 264917.
These benchmark prices have attracted significant interest from investors and traders, reflecting the global trend of rising gold prices. Gold prices in Pakistan rose yesterday to record highs on Wednesday, following a global uptrend.
The price of gold per tola rose by 3,800 rupees, reaching 308,000 rupees, while 10-gram gold rose by 3,258 rupees to 264,060 rupees. This followed an earlier rise of Rs 1,000 per tola on Tuesday.
Internationally, gold rose $34 to $2,944 an ounce, supported by geopolitical tensions and increased demand for safe haven assets.
Experts pointed to the market’s strong bullish momentum, although there is no correction, which usually follows major price gains.
Gold prices could reach $3000-3100 in the near future, but traders remain cautious due to potential volatility.
Meanwhile, the Pakistani rupee weakened slightly by 0.04% against the US dollar, closing at 279.47. State Bank of Pakistan raised Rs 258.8 billion in treasury bond auction, below its target of Rs 350 billion.
Due to the uncertain outlook, gold may outperform stocks as investors seek stability. Traders should remain vigilant as the Fed evaluates economic data in the coming months, balancing risk exposure with defensive assets.
Gold prices rise on Trump fears and inflation
According to data available on the Indian Multi-Commodities Exchange (MCX), the price of the precious metal has risen by more than 11.75 percent so far this year. Gold was priced at Rs 77,456 per 10 grams on the last day of the previous year.
Bloomberg reported that one of the main reasons for the rise in gold prices is the growing fears that US President Donald Trump may abandon US support for Ukraine in the ongoing Russian-Ukrainian war. The U.S. leader said Wednesday on social media that Volodymyr Zelensky “better move quickly” to reach a peace deal “or there will be no country left.”
President Trump’s threats to impose tariffs on all countries that do business with the United States have raised concerns among the global business community. Earlier, during Prime Minister Narendra Modi’s visit to the country, he promised that the United States would impose-for-tat tariffs on each country that would be equal to those imposed on American goods in those particular countries.
Investors are considering the US Federal Reserve’s latest minutes, which underscored the cautious stance of U.S. policymakers on interest rates amid stubborn inflation and economic uncertainty. Low borrowing costs tend to benefit bullion, because they do not pay interest.
The stock market responded cautiously to the Fed’s minutes, with U.S. futures lower on Thursday. Investors weigh the potential inflationary effects of Trump’s tariff threats and the Fed’s cautious stance on monetary policy. Safe-haven assets such as gold and the Japanese yen saw an increase in demand, while Treasury yields fell.
For traders, the Fed’s hesitation on cutting interest rates and the imminent threat of higher tariffs point to a short-term bearish outlook. Persistent inflation risks, potential trade policy shocks, and liquidity concerns could lead to volatility in the stock and bond markets.
