Gold surged to a new record high on Monday, marking its largest quarterly gain in over 38 years amid growing concerns over the U.S. President Donald Trump's tariff policies and their potential impact on the global economy.
U.S. gold futures rose 1.3% to $3,155.30, bringing the metal’s quarterly gain to over 18%, its highest since September 1986.
Gold's rally has been driven by rising geopolitical and economic uncertainties, interest rate cut bets, strong central bank purchases, and increasing exchange-traded fund (ETF) demand. The weakening dollar, down 0.3%, also made gold more attractive for international buyers. In response to the rapid price surge, multiple banks have revised their 2025 price forecasts, with Goldman Sachs projecting gold to reach $3,300 per ounce by year-end.
Markets remain on edge ahead of Trump's upcoming reciprocal tariff announcements on April 2 and auto tariffs set to take effect on April 3. On Sunday, Trump warned of additional secondary tariffs of 25%-50% on buyers of Russian oil if Moscow obstructs his efforts to end the war in Ukraine.
Despite market speculation on Federal Reserve rate cuts, San Francisco Fed President Mary Daly expressed doubts about the likelihood of two cuts this year, citing recent inflation data. Historically, lower interest rates benefit non-yielding assets like gold, further fueling investor interest in the precious metal.
With at least 15 record highs this year, gold remains a preferred safe-haven asset, reinforcing its role as a hedge against economic and political instability.