On Friday, April 11, driven by the weakening US dollar and escalating US-China trade tensions, the price of gold broke through the key level of $3,200 per ounce for the first time, reaching a new high and highlighting investors flocking to safe-haven assets.
According to Reuters, as of 02:30 GMT on Friday morning (10:30 PM ET on Thursday), spot gold rose by 1.3% to $3,216.48 per ounce. The price of gold hit a historical high of $3,219.73 earlier in the session, marking a weekly increase of over 5%.
US gold futures rose by 1.9% to $3,236.00.
“The rapid depreciation of the US dollar appears to be the main driver of the current rebound in gold prices, reflecting investors continuing to withdraw from assets priced in US dollars. Against the backdrop of tariff policy uncertainty, stocks and bonds are being sold off,” said Ilya Spivak, Global Macro Director at Tastylive.
The decline in the US dollar has made gold priced in dollars more affordable for overseas buyers.
Additionally, US President Trump increased tariffs on Chinese imports to 145% while announcing the suspension of previously announced equivalent tariffs on dozens of countries. Following a significant rise on Wednesday, major stock indices fell on Thursday.
In response to the stock market decline on Thursday, Trump stated that there will always be transitional difficulties, but he remains confident in his plans.
US Treasury Secretary Benson commented on the stock market on Thursday, saying that a ratio of 2 to 1 between increases and decreases is not a bad ratio. As negotiations continue with the US and other countries and solutions are reached, “we will ultimately gain great certainty… Today’s inflation data is very good. Oil prices are falling… I don’t see anything abnormal today.”
Financial market analyst Kyle Rodda from Capital.com stated, “The next significant milestone people are watching for is $3,500. I doubt we will reach this goal immediately or smoothly.”
Apart from tariffs, factors such as central bank demand, expectations of a Fed rate cut, geopolitical instability in the Middle East and Europe, and increased funding flowing into gold-supported exchange-traded funds (ETFs) have also driven the rise in gold prices this year.
Data indicates that the US consumer price index unexpectedly decreased in March, but inflation risks tend to lean towards the upside.
Traders are currently betting that the Fed will resume rate cuts in June, potentially lowering interest rates by a full percentage point by the end of 2025.
Spot silver fell by 0.2% to $31.13 per ounce, while platinum dropped by 0.4% to $934.20 per ounce. Palladium rose by 0.7% to $914.70 per ounce.