The price of Gold (XAUUSD) surged over 1% reaching a record high of $3,063 per troy ounce after U.S. President Donald Trump announced a 25% tariff on imported vehicles and automotive parts. This policy has intensified global trade tensions, inciting panic among investors and leading to a significant increase in demand for safe-haven assets like Gold. The rising uncertainty has also shaken Wall Street, which saw its stocks plunge into negative territory, while Gold traded at an impressive $3,063, reflecting an extraordinary one-day trading rally.
In addition to the pressure on stock markets, this protectionist policy has delivered a strong blow to the U.S. Dollar. The U.S. Dollar Index (DXY), which measures the greenback against a basket of major currencies, fell by 0.33% to 104.28. This decline is fueled by growing economic uncertainty and expectations of a 64.5 basis point rate cut by the Federal Reserve in 2025. With the U.S. Dollar weakening, Gold’s appeal as a primary hedge asset has increased dramatically amid the global economic turmoil.
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Investors are now focusing on the core PCE inflation data from the U.S., considered a key indicator for the Federal Reserve’s monetary policy. Should this data reveal persistent high inflation, expectations for a rate cut could be shaken, potentially altering the trajectory of Gold and other global currencies. With markets remaining volatile and economic policies uncertain, traders are on high alert for the possibility of even more spectacular surges in Gold prices in the future.
