Gold continues to rise in light of Trump's plans

What’s happening :- Gold prices surged to record highs on Wednesday, following another tariff announcement by US President Donald Trump.

What happened :- Trump announced reciprocal tariffs on several nations, sparking renewed speculations of a trade war, boosting the appeal of the safe-haven bullion.

Weakness in the US dollar lent further support to the yellow metal during Wednesday’s session.

Gold continues to rise

Why it matters: The US President announced a 10% baseline tariff on imports from all nations and disclosed increased rates for countries with trade surpluses. He presented a chart displaying tariffs, which included a 34% tariff on China, 24% on Japan, 20% on the European Union and a 25% tariff on foreign-made vehicles.

Trump said that these measures would provide a boost to domestic manufacturing and result in lower trade deficits. These tariffs are expected to escalate a trade war that Trump kicked off after returning to the White House in January this year.

Gold price today

Gold prices received further support from prospects of interest rate cuts, increased buying from central banks and higher demand for gold-backed ETFs.

Weakness in the US dollar also provided support to gold prices, as a lower greenback makes metals cheaper for foreign currency holders. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.4% following the announcement of Trump’s latest tariff plans.

Meanwhile, data released by the ADP on Wednesday showed private businesses in the US added 155,000 jobs in March, following 84,000 job adds in February. The figure also came in higher than market projections of 105,000.

The new customs tariff led to a rise in gold.

Gold has surged more than $500 so far this year, with investors preferring the yellow metal during uncertain times. WTI gold futures gained 0.6% to settle at $3,166.20 an ounce on Wednesday.

In other metals trading, silver surged to $34.65 an ounce, platinum settled higher at $995.20 and palladium closed at $985.30.

What to watch: Downbeat jobs and manufacturing data from the US would now shift investor focus to the NFP (nonfarm payrolls) report, due this Friday. The US economy, which added 151,000 jobs in February, is expected to add 140,000 jobs in March, while the unemployment rate is projected to remain at 4.1%.