Gold prices surged today as President Donald Trump’s retaliatory tariff policy took effect.
Spot gold, which had traded as low as $2,968 per ounce earlier in the day, spiked to $3,040 per ounce by noon. By 2:15 p.m., spot gold had climbed further to $3,055 per ounce, an increase of approximately $85 per ounce from the morning’s low.
Despite recent volatility and declines, analysts continue to view gold as a safe-haven asset of choice during these uncertain times.
Gold has had an impressive run over the past year, climbing 40% to an all-time high of $3,167.77 per ounce on April 3. However, President Trump’s tariff announcement triggered a sharp sell-off, with analysts attributing the drop to short-term traders liquidating positions to cover losses in other assets.
As of 11:01 a.m. Vietnam time, the new tariff policy took effect, with imports from 86 countries/territories now facing higher tariffs ranging from 11% to 84%. China, in particular, will face a total tariff of 104% on its exports to the US, including the retaliatory tariff of 34% and an additional 50% decided by Trump on April 8.
According to Alex Chiu, senior ETF strategist at Value Partners, gold can be used to mitigate losses during periods of extreme market volatility. In a market downturn, brokers may initiate a margin call, selling gold to cover losses in other positions. He added that gold is a highly liquid asset.
Gary Ng, senior economist at Natixis Investment Bank, noted that the gold sell-off was a short-term phenomenon. “It doesn’t change the fact that if investors want to find a safe haven in the future, gold will definitely still be one of the choices,” he said.
Central banks around the world are likely to reduce their US dollar reserves, suggested Chen Zhiwu of the University of Hong Kong. The People’s Bank of China has also been increasing its gold reserves for the fifth consecutive month, with total reserves reaching 73.7 million ounces as of the end of March, up from 73.61 million ounces in February, according to PBOC data.
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