Gold Prices Soar Following US’s 90-Day Tariff Reprieve

As of 10:16 am New York time, according to Kitco data, spot gold on the New York floor traded at $3,112 an ounce, up nearly 1% on the day. Earlier, spot gold had risen nearly 3.4% and surpassed the $3,000 per ounce mark in the April 9 session—marking the strongest daily gain in several months.

Prior to this, spot gold had climbed 40% in a year, reaching an all-time high of $3,167.77 an ounce on April 3, but President Donald Trump’s announcement on retaliatory tariffs caused gold prices to plummet. Analysts attributed the drop to short-term sell-offs by traders needing to cover losses from other assets.

According to some analysts, gold prices remain in a strong uptrend and are expected to face limited selling pressure, as some investors still favor holding safe-haven assets even as market sentiment improves.

“This is uncharted territory, and traders will be quick to act as news headlines continue to guide sentiment. In this context, with the Fed increasingly cornered as US recession fears mount—and now expected to deliver four 0.25 percentage point rate cuts—the demand for gold as a haven could well remain elevated,” wrote Ricardo Evangelista, Senior Analyst at ActivTrades, in a note.

While the Trump administration has temporarily halted tariffs for 90 days, economists note that the trade war is not over. The US government says it will maintain a basic 10% tariff on countries including Canada, Mexico, and the European Union. The US is also escalating its trade war with China, imposing a 125% tariff on imports.

Some analysts note that it will take time to repair the full damage that these tariffs have caused to global markets. Bill Adams, Senior Economist at Comerica Bank, stated in a note that while the S&P 500 has recovered from lows, it is still down 8% year-to-date.

“Businesses will be relieved that the direction of trade policy seems less disruptive than it could have been yesterday. Still, the large uncertainty about policy will weigh on investment decisions for the next few months,” Adams wrote in the note. “Also, the 125% tariff on imports from China will be a big problem for many businesses if it remains in place. After the April tariff shock, trade policy uncertainty could be an even bigger drag on economic growth in 2025”

Jeffrey Roach, Chief Economist at LPL Financial, said he expects the economy to continue to struggle.

“Market volatility may remain elevated, despite the 90-day tariff pause for non-retaliating countries. Hard data from earlier in the year shows the economy slowing, regardless of trade policy,” he said.

Gold prices are also expected to benefit from safe-haven demand, partly due to concerns about the US Treasury market and China’s devaluation of the yuan.

“Gold is being supported by buying from China, stemming from yuan devaluation fears amid the impact of tariffs and a prolonged deflationary environment, exacerbated by a slumping real estate market. However, concerns about the current level of leverage in the US Treasury market could also push investors towards gold as a safe haven. Gold and Treasury bonds typically compete for safe-haven status, with the latter usually prevailing when yields are higher. But if investors are worried about the stability of the US government bond market, gold could become the obvious alternative. When the Fed intervened in March 2020 by cutting rates by 100 basis points in an emergency move, gold prices subsequently rose about 30% for the remainder of the year.” SP Angel brokerage said in a recent report.