Gold prices soared to new heights as trade war fears prompted sharp declines in Asian stock markets, with concerns growing over US President Donald Trump’s latest tariff announcements.
On Friday morning, gold was trading at $3,080.76 per ounce, marking a record high. It was on track for a fourth consecutive weekly gain, driven by increased demand for safe-haven assets as uncertainty surrounding global trade escalates.
Asian markets were hit hard, with heavy losses in South Korea and Japan. Shares of global automakers were particularly affected, as Trump’s recent tariff actions targeted the automotive sector, exacerbating fears of a prolonged trade conflict. 
Japan’s Nikkei 225 index dropped more than 2%, led by a sharp decline in Toyota and Honda shares. South Korea’s benchmark index fell to a two-week low, down by 1.3%, as the automotive industry is crucial to both economies. Meanwhile, Hong Kong’s Hang Seng index managed to rise by 0.6%, largely unaffected by the tariff threat.
“Gold’s surge to a record high is a direct response to the growing volatility in the markets, with traders flocking to safer assets as trade war tensions continue to build,” said Fawad Razaqzada, market analyst at City Index and Forex.com. “The situation is set to intensify as we approach April 2, the day when Trump’s new tariffs will come into effect.”
Trump’s administration has intensified the trade dispute by imposing a 25% tariff on all imported cars and car parts, effective April 2. Additionally, the US has introduced 25% tariffs on steel and aluminum imports, which will impact industries like construction, automotive, and energy. These measures are part of an ongoing strategy to boost domestic production.
The US president has also announced a 10% tariff on Canadian energy products outside the framework of the US-Mexico-Canada Agreement, as well as further tariffs on goods from China, on top of the existing 10% levy. In retaliation, Canada has planned to impose tariffs on $22 billion worth of US goods, and both China and the European Union have implemented countermeasures.
As global markets react to these developments, stock market volatility has surged. Analysts are increasingly concerned about the potential economic fallout from Trump’s trade policies, with some raising the likelihood of a US recession. Goldman Sachs recently lowered its 2025 GDP growth forecast for the US from 2.4% to 1.7%, citing uncertainty over the tariffs. JPMorgan and Pimco also raised their recession probability estimates.
Despite stronger-than-expected economic data from the US, including an upward revision of fourth-quarter GDP growth, fears about the broader economic impact of escalating trade tensions are dominating sentiment.
Gold has risen by about 16% this year, bolstered by strong demand from central banks and investors seeking safety amid rising geopolitical risks. Analysts have been revising their gold price targets upward, with Goldman Sachs now forecasting a year-end price of $3,300 per ounce, citing robust central bank buying and significant inflows into gold-backed exchange-traded funds.
“Gold remains the most reliable hedge against the uncertainties stemming from Trump’s trade policies,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
Samer Hasn, senior market analyst at XS.com, added that the gold rally is driven by growing pessimism surrounding the US economy, fueled by concerns over the negative impact of Trump’s policies. Additionally, the uncertain recovery of the Chinese economy, coupled with weak domestic demand and export threats, is further supporting gold’s status as a safe-haven asset.
With global tensions mounting, gold continues to shine as investors seek refuge from the potential economic fallout of a deepening trade war.
