Gold Price Reaches Record High
The gold price reached yet another record high on Friday, April 11, breaking US$3,200 per ounce. This significant milestone marks a major gain for the precious metal, which has been on the rise since the beginning of the year. On Friday morning, gold surged past the US$3,200 mark, climbing as high as US$3,244.33 per ounce.
Causes of the Price Surge
The rise in gold price comes after a week of chaos caused by US President Donald Trump’s on-again, off-again global tariff scheme. Trump’s announcement of a 10 percent tariff on all but a handful of countries, including Canada and Mexico, with more severe reciprocal tariffs to come into effect, sparked market volatility. However, on Wednesday, April 9, Trump announced he would pause the additional tariffs for 90 days, saying more than 70 countries had contacted him to make deals.
Impact of Tariffs on the Market
The tariffs levied against China have now increased to 145 percent, despite the pause on tariffs for other countries. This move has resulted in political and financial turmoil, sparking selloffs in major stock markets and pushing prices for safe-haven assets like gold to fresh records. The US bond market, normally a safe haven during market volatility, saw a significant selloff as US tariffs and worries about the US economy’s stability spooked traders.
Global Response to Tariffs
In response to the threat of tariffs from the US government, China, Japan, and South Korea agreed on March 30 to seek deeper free trade ties. This deal marks a significant move by the three countries, following decades of US diplomacy to maintain close relationships with Japan and South Korea. The move is seen as a way to counterbalance the impact of US tariffs and promote economic cooperation among the three nations.
Conclusion
The gold price reaching a record high of over US$3,200 per ounce is a significant event in the financial markets. The ongoing trade tensions and tariffs imposed by the US government have created a sense of uncertainty, leading investors to seek safe-haven assets like gold. As the global economy continues to navigate these challenges, it will be interesting to see how the gold price and other financial markets react.
