BENGALURU: Gold prices surged above $3,100 per ounce on Monday to a record high, as worries about potential inflation due to US tariffs set the safe-haven asset up for its strongest quarter since 1986.
Bullion continued its remarkable rally that has already seen the metal gain around 18 percent so far this year.
Spot gold jumped 1.1 percent to $3,117.43 per ounce by 12:35 p.m. Saudi time, having hit a record $3,128.06 earlier. US gold futures were up 1.1 percent to $3,149.60.
Bullion rose more than 27 percent last year as several bullish factors, including a favorable monetary policy backdrop and robust central bank buying, combined to send investors toward the safe-haven asset.
On technical charts, gold’s Relative Strength Index stands above 77, indicating the market is overbought, but analysts have said momentum has defied any standard logic of where prices are positioned.
“Gold’s bull run is the reflection of the anxiety around tariffs. The fears that these tariffs are going to be growth constraining, potentially leading to lower economic outcomes,” is supporting gold,” Nitesh Shah, commodities strategist at WisdomTree, said.
Trump is expected to announce reciprocal tariffs on April 2, while automobile tariffs will take effect on April 3.
A combination of other factors, including rate cuts bets, central bank purchases and demand for exchange-traded funds have all helped non-yielding bullion’s record run.
“Gold prices could be trading around $3,500 about this time next year and that reflects sentiment toward the metal remaining strong, primarily with all the geopolitical risks still there,” Shah said.
On the physical front, gold demand in India remained sluggish last week because of record high prices and as jewellers were busy closing accounts for the financial year, while most other Asian hubs also saw waning buying interest.
Spot silver rose 0.2 percent to $34.17 an ounce, platinum was up 1 percent to $993.15 and palladium gained 0.5 percent to $976.75. All three metals headed for monthly gains.
