Gold gave up gains after earlier hitting a record amid uncertainty as traders braced for a major escalation in US President Donald Trump’s trade tariffs.
Traders are on edge as Trump plans to announce sweeping levies on all of America’s trading partners on Wednesday, raising the risks of retaliatory measures.
The precious metal has been one of the strongest performing commodities this year, posting its best quarter since 1986 in the opening three months. The ascent has been fueled by consistent central-bank buying, plus a rising tide of haven demand amid intensifying geopolitical and macro uncertainties.
“Gold begins the second quarter of the year from a historically strong position,” Quasar Elizundia, a researcher at Pepperstone Group Ltd., said in a note. “The main driver behind this exceptional gold rally is the growing concern over escalating trade and geopolitical tensions.”
Bullion is often the go-to haven in times of uncertainty. Holdings in gold-backed exchange-traded funds have climbed more than 6% so far in 2025, following four years of net outflows, according to data compiled by Bloomberg. That’s raised the total to the highest since September 2023.
Chinese buying through gold ETFs in the domestic market has also contributed to the precious metal’s strong performance, according to Daniel Ghali, senior commodity strategist at TD Securities.
Domestic sentiment for gold may have been boosted by Beijing’s initiative to let insurers invest in precious metals, said Ghali, adding that TD estimated that a 1% allocation from the insurance firms alone could create a buying impulse equivalent to roughly 50% of global yearly central bank purchases.
Spot gold — which rose 19% in the first quarter — was down 0.5% at $3,106.93 an ounce as of 12:24 p.m. in New York after rising to as much as $3,149 earlier. The Bloomberg Dollar Spot Index fell 0.1%. Silver, platinum and palladium edged lower.
(By Jason Scott and Yvonne Yue Li)
