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Informist, Thursday, Apr. 3, 2025

 

--COMEX June gold contract hits fresh all-time high of $3,201.6 per ounce 

 

MUMBAI – Futures of gold on COMEX hit a new all-time high early on Thursday due to heightened safe-haven demand after US President Donald Trump imposed sweeping trade tariffs, which sparked fear of a recession in the US and a global growth slowdown. Trump announced a 10% duty on all US imports, 25% duties on automobiles, and additional reciprocal tariffs against at least 18 countries which will be equivalent to half of their duties on American goods. 

 

At 0805 IST, the most-active June gold contract on COMEX was at $3,175 per ounce, up 0.3% from the previous close. The contract hit a fresh lifetime high of $3,201.6 per ounce earlier in the day.

 

Though the reciprocal tariffs do not apply to certain imports, including copper, pharmaceuticals, lumber, and gold, they were more aggressive than expected, especially against some of the US' biggest trading partners, and this has rattled global markets and bewildered US allies.

 

China was by far the worst hit by the announcement, with total tariffs on the country now coming up to 54%. The European Union will see 20% tariffs, while Vietnam, Taiwan, Japan, and India were slapped with tariffs between 24% and 46%. Countries with lower duties on US imports were subject to lower tariffs. These include Brazil, Chile, Australia, the UK, and Colombia - all of which will be subject to 10% tariffs. 

 

Prices of gold also rose as the tariff announcent triggered hope of a rate cut by the US Federal Reserve. "The prospect of a weaker US economy from higher US tariffs has boosted market expectations of rate cuts by the end of the year," Dow Jones quoted Commonwealth Bank of Australia analyst Vivek Dhar as saying. Markets are now pricing in 85-90 basis points of cuts by the year-end, up from 75-80 basis points on Wednesday, he says. "Gold futures should continue to increase if further Fed fund rate cuts are priced in," Dhar says. Lower interest rates make the non-yielding precious metal more attractive to investors.

 

Goldman Sachs had on Mar. 26 raised its 2025-end gold price forecast to $3,300 per ounce from $3,100 per ounce, with a target range of $3,250 to $3,520 per ounce, media reports said. The investment bank cited stronger than expected inflows into exchange-traded funds and sustained demand from central banks as key factors behind the revised outlook.  End

 

US$1 = INR 85.50

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Shreya Shetty

Edited by Avishek Dutta

 

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