Washington: US President Donald Trump’s sweeping reciprocal tariffs, announced on April 2, led to selling pressure in gold but it may be short-lived as the demand for the commodity is to remain strong due to tariff-induced uncertainties, experts told Anadolu.
According to Anadolu Agency, gold fell more than 2% last Friday after the markets were met with Trump’s reciprocal tariffs. After reaching an all-time high of $3,167.88 per ounce on Tuesday, gold fell to $3,010. Experts believe investors took partial profits from their gold positions to compensate for the losses in the stock markets. Tariff uncertainty is likely to continue to increase and solidify the haven appeal of gold, and central bank purchases are expected to contribute to gold demand.
Juan Carlos Artigas, global head of research at the World Gold Council, stated that gold prices have seen a consistent positive trend since the year started, and it is normal for gold to experience price consolidation after the rapid rises in recent months, but there is still uncertainty over the ultimate impact of the tariffs. Artigas noted that strong fundamental drivers may support investment demand in the current environment, and the pullback may also bring some respite to retain consumer demand.
Ewa Manthey, commodities strategist at ING Think, said gold lost some value after the sell-offs in the stock markets following the reciprocal tariff announcements. She believes that gold’s selloff will be short-lived as trade and tariff uncertainty is likely to continue to bolster its safe-haven appeal. Manthey mentioned that the People’s Bank of China added gold to its reserves for about 10 months in a row, and five consecutive times in March alone, despite the high prices. She added that central banks will continue to buy gold as geopolitical tensions and the economic climate will continue to push them to increase their allocation towards safe-haven assets.