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What’s happening: Gold prices recorded sharp gains on Thursday, reaching all-time highs during the session.
What happened: Investors have been flocking to safe-haven options due to rising global trade tensions after US President Donald Trump’s tariff announcements.
Trump’s auto tariffs and weakness in the US dollar provided support to gold on Thursday.
Why it matters: On Wednesday, President Donald Trump announced plans of imposing 25% tariffs on vehicles and foreign-made auto parts imported into the US. Several nations around the globe threatened to impose retaliatory tariffs following Trump’s announcement.
Shares of some of the world’s biggest automakers came under pressure following the news. Investors sold auto shares and diverted their funds to precious metals.
Gold also received support from increased central bank inflows and strong ETF demand.
Weakness in the US dollar also sent support to gold, 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 0.3% to 104.34 on Thursday.
Goldman Sachs raised its gold price outlook for 2025 to $3,300 an ounce, from its earlier projection of $3,100, citing better-than-expected ETF inflows.
Bank of America also raised its average price projection for gold, citing rising concerns from US trade policies. BofA analysts expect gold to trade at $3,063 an ounce by yearend, versus their previous outlook of $2,750 an ounce.
US gold futures added 1.3% to close at $3,061 an ounce on Thursday, after jumping to a record high of $3,071.30 earlier in the session.
Silver prices settled sharply higher at $35.083 an ounce, platinum rose to $1,000.6 and palladium settled at $985.10.
What to watch: Investors await the release of data on US PCE (personal consumption expenditures (1630 UAE Time) today, which would provide some insights into the Federal Reserve’s upcoming internet rate decision.
The core PCE price index, the Fed’s preferred gauge to measure inflation, had risen by 2.6% in January and is expected to rise by 2.7% year-over-year in February.
Context: European stock markets settled lower on Thursday as investors digested fresh auto tariffs announcement by US President Donald Trump.
Details: The STOXX Europe 600 Index fell 0.44% to close at 546.31 on Thursday, as all major bourses moved lower during the session. The Stoxx Europe autos index shed around 1% after President Donald Trump announced plans to impose tariffs of 25% on imported vehicles and foreign-made auto parts.
Shares of Stellantis fell 4.2% and Mercedes-Benz by around 2.7% on Thursday.
On the economic data front, bank lending to households in the Eurozone increased by 1.5% year-over-year to €6.956 trillion in February, following a 1.3% rise in the previous period. This marked the biggest annual increase since June 2024.
London’s FTSE 100 fell 0.27% to close at 8,666.12 on Thursday, while Germany’s DAX 40 declined 0.70% and France’s CAC 40 lost 0.51%.
What to watch: Investors await the release of economic data on Eurozone’s economic sentiment (1400 UAE Time), consumer confidence (1400 UAE Time) and consumer inflation expectations (1400 UAE Time) today.
The Eurozone’s economic sentiment indicator, which rose to 96.3 in February, is expected to improve further to 97 in March. Analysts expect Eurozone’s consumer confidence indicator to decline by 0.9 points to -14.5 in March.
Consumer confidence price trends in the Eurozone, which rose to 21.10 points in February from 20.20 points in the previous month, are expected to decline to a reading of 19 in March.
Other Markets: US trading indices closed lower on Thursday, with the Dow Jones index, S&P 500 and Nasdaq 100 down by 0.37%, 0.33% and 0.59%, respectively.
Russia’s President Vladimir Putin plans to visit India this year, which would be his first visit to the country since the invasion of Ukraine. The news sent the RUB/USD pair slightly higher in forex trading this morning.
Saudi Arabia’s trade surplus fell to SAR 24.6 billion in January, from SAR 27.9 billion in the year-ago month, exerting pressure on the SAR/USD forex pair.
New Zealand’s ANZ-Roy Morgan Consumer Confidence index declined to a reading of 93.2 in March, which sent the NZD/USD pair lower in forex trading this morning.
Argentina reported a current account surplus of $1.029 billion in the fourth quarter, versus a deficit of $2.671 billion in the year-ago period, lending support to the ARS/USD forex pair.
Philippines’ trade deficit shrank to $3.2 billion in February, from $3.6 billion in the year-ago month. However, the PHP/USD pair fell slightly in forex trading this morning.
Spain’s inflation rate (1200 UAE Time), Germany’s unemployed persons (1255 UAE Time), unemployment change (1255 UAE Time) and unemployment rate (1255 UAE Time), Italy’s business confidence (1300 UAE Time), consumer confidence (1300 UAE Time), industrial sales (1400 UAE Time) and PPI (1500 UAE Time), Eurozone’s industrial sentiment (1400 UAE Time), selling price expectations (1400 UAE Time) and services sentiment (1400 UAE Time), Brazil’s IGP-M inflation (1500 UAE Time), unemployment rate (1600 UAE Time) and net payrolls (1800 UAE Time), India’s bank loan growth (1530 UAE Time), deposit growth (1530 UAE Time) and foreign exchange reserves (1530 UAE Time), Mexico’s unemployment rate (1600 UAE Time), Canada’s GDP (1630 UAE Time) and budget balance (1900 UAE Time), as well as US personal income (1630 UAE Time), personal spending (1630 UAE Time), Michigan consumer sentiment (1800 UAE Time), Michigan consumer expectations (1800 UAE Time), Baker Hughes oil rig count (2100 UAE Time) and Baker Hughes total rigs count (2100 UAE Time).
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