Gold rose to a new all-time high as concerns about the impact of tariffs on the global economy continued to push investors to seek safety in the precious metal, even after easing U.S. inflation data.
US core inflation cooled broadly in March, indicating some relief for consumers ahead of widespread tariffs, which risk contributing to price pressures. U.S. equities fell after the biggest buying in years, while fixed income rallied following the release. Traders discounted expectations for three interest rate cuts in the remainder of the year, with the possibility of a fourth. Lower rates tend to benefit gold, as it does not pay interest.
Risks and uncertainty remained following U.S. President Donald Trump's 90-day tariff pause on higher tariffs affecting dozens of trading partners. As of Thursday, Trump's tariffs on Chinese imports stand at at least 145%, which includes both a 125% rate covering "reciprocal" duties and levies imposed on China for retaliating against U.S. import duties, according to a White House memo.
The latest development fueled skepticism that the trade talks will close on time, despite White House Economic Council Director Kevin Hassett's assertion that the U.S. is "well advanced" in its talks with economic partners.
Financial markets have been gripped by the constant back and forth on the Trump administration's tariff plan, trying to find direction and certainty. That has been supporting bullion given its safe-haven status. Gold's 21% rally this year has also been driven by hopes for further Fed easing and central bank purchases.
"We remain quite positive on gold," Dominic Schnider, head of Asia-Pacific commodities and currencies at UBS Global Wealth Management, said on Bloomberg Television. "The next step is going to be, at some point, Fed intervention - and that gives the next leg up for gold."
Spot gold gained 2.8% to US$3,168.65 an ounce at 11:52 a.m. in New York. The Bloomberg Dollar Spot Index fell for a third straight day. Silver was little changed, while platinum advanced. Palladium fell.
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