Gold prices rose by more than 1% on Thursday, with investors turning to the precious metal as a safe haven following the U.S. government’s decision to raise tariffs on Chinese imports. This move escalates the ongoing trade war between the two largest economies in the world, despite U.S. President Trump’s temporary pause on tariffs for other nations.
Spot gold surged 1.5%, reaching $3,129.33 an ounce as of 0514 GMT, while U.S. gold futures climbed 2.2%, reaching $3,145.80. This follows a strong performance in the previous session, marking gold’s best day since October 2023.
The U.S. administration announced that tariffs on Chinese imports would rise to 125% from 104%, further intensifying the ongoing trade dispute. The U.S. and China have been engaged in a series of reciprocal tariff hikes over the past week, creating uncertainty in global markets.
Despite this, President Trump decided to ease tariffs on several other countries temporarily. Analysts are predicting that the current tariff environment could push gold prices higher, particularly if the U.S. economy enters a period of slow growth. Edward Meir, an analyst at Marex, stated, “If we enter a slow growth period, which is our base case, we think rates will eventually head lower and push gold higher since inflation worries will still be with us for much of the year due to tariff impacts.”
Gold has risen over 18% in 2025, driven by multiple factors including concerns over tariffs, potential interest rate cuts by the Federal Reserve, geopolitical tensions, and strong central bank demand. The metal’s role as a hedge against inflation and global uncertainties has made it a popular investment amid ongoing market volatility.
Minutes from the Federal Reserve’s most recent meeting revealed that policymakers are increasingly concerned about the risks of higher inflation alongside slower economic growth. Some Fed officials noted that difficult trade-offs may arise as the central bank balances inflation pressures with slower growth. Non-yielding gold could lose its appeal if inflationary pressures prompt the Fed to maintain higher interest rates.
Traders are now looking ahead to the U.S. Consumer Price Index (CPI) report later in the day, as well as the Producer Price Index (PPI) release on Friday, which could provide more insight into the Fed’s future rate decisions.
Meanwhile, other precious metals experienced mixed movements. Spot silver rose 0.6% to $31.21 an ounce, while platinum fell 0.3% to $935.54, and palladium declined by 1% to $922.00.