Gold Prices Reach Record High Amid Trade Tensions and Economic Uncertainty

Gold surged to an all-time high on Friday, fueled by escalating trade tensions, uncertainty over U.S. tariffs, and growing expectations of monetary policy easing by the Federal Reserve.

Spot gold reached a record $2,993.80 per ounce during early trading before settling slightly lower at $2,984.71 as of 0701 GMT. Meanwhile, U.S. gold futures edged up 0.2% to $2,997.50, keeping the metal within reach of the psychologically significant $3,000 mark.

Gold Prices in the UAE Hit New Highs

The surge in global prices has impacted gold rates in the United Arab Emirates, where the Dubai City of Gold reported the following rates:

• 24K gold: Dhs360 per gram
• 22K gold: Dhs335 per gram
• 21K gold: Dhs321.25 per gram
• 18K gold: Dhs275.25 per gram

With a 2.5% gain this week, gold is set to mark its second consecutive weekly increase, driven by strong safe-haven demand.

Trade Wars and Inflation Drive Gold’s Rally

Experts attribute gold’s rally to worsening global trade tensions and expectations that the Federal Reserve may adopt a more accommodative monetary policy.

“The risk-off market stance reflects investors’ expectations that trade tensions are likely to get worse before they improve, leading them to turn to gold as a hedge against portfolio volatility,” said IG market strategist Yeap Jun Rong.

In a key development in U.S. President Donald Trump’s trade war, the European Union has retaliated against Washington’s blanket tariffs on steel and aluminum, further stoking economic uncertainty.

$3,000 Milestone in Sight

Analysts believe gold could soon break the $3,000 mark, especially as reciprocal tariffs and economic uncertainty continue to drive investor sentiment.

“As we approach the second quarter, where reciprocal tariffs could trigger another wave of market turbulence, gold remains a compelling safe-haven asset in an environment where alternatives are scarce,” added Rong.

Federal Reserve Decision Looms

Investors are now looking ahead to the Federal Reserve’s monetary policy meeting next Wednesday. The central bank is expected to maintain its benchmark interest rate in the 4.25%-4.50% range, a move that could further support gold prices.

Historically, gold performs well in low-interest-rate environments, as it does not yield interest, making it a more attractive investment compared to bonds or savings accounts.

As global economic concerns persist, analysts say gold’s upward momentum could continue in the coming months, reinforcing its position as the ultimate safe-haven asset.