Gold prices surged past the $3,000 mark on Tuesday, setting a new all-time high as investors sought refuge in the precious metal amid escalating geopolitical tensions and looming U.S. tariffs. Spot gold reached a peak of $3,028.24 early in the session, before settling at $3,034.17 an ounce, up 1.1%. U.S. gold futures gained 1.2% to $3,043.
Bullion has gained more than 14% year-to-date, supported by persistent inflation fears, central bank buying, and global economic uncertainty. "There is a perfect storm of gold-supporting factors," Ole Hansen, head of commodity strategy at Saxo Bank, said. "The latest focus is the Middle East concerns that come on top of economic concerns about the direction of the U.S."
The surge follows renewed violence in the Middle East, where Israeli air strikes in Gaza on Tuesday killed at least 326 people, according to Palestinian health officials, shattering a fragile two-month ceasefire. Meanwhile, U.S. President Donald Trump announced a series of new tariffs, including a flat 25% duty on steel and aluminum, alongside sectoral tariffs set to take effect April 2.
These geopolitical and trade risks are adding fuel to gold's momentum. "You've got the FOMC in the U.S. amid quite a chaotic tariff policy backdrop that could send gold potentially even higher if they have a somewhat dovish stance on rates," said Nitesh Shah, commodities strategist at WisdomTree.
The Federal Reserve is expected to keep interest rates steady at its policy meeting this week, after executing three rate cuts in 2024. However, markets are pricing in a resumption of easing as early as June.
Analysts are raising their price targets in response to gold's rapid rally. ANZ upgraded its three-month forecast to $3,100 and its six-month projection to $3,200. UBS also set a target of $3,200 by year-end.
Russ Mould, investment director at AJ Bell, attributed gold's rise to "central bank purchases and large shipments into the U.S. ahead of potential tariff impositions." He added, "The metal is doing well-but gold mining stocks are yet to shine."
Despite the bullish sentiment around bullion, gold miners' shares remain subdued. The NYSE Arca Gold Bugs Index stands at levels seen in April 2006, when gold was trading at just $600 an ounce, highlighting a disconnect between metal prices and miner performance.
While gold thrives, other asset classes are struggling. Stock futures edged lower Tuesday after two days of modest gains. Dow, S&P 500, and Nasdaq 100 futures each slipped by 0.3% to 0.5%. Tesla shares fell over 3% in premarket trading after RBC trimmed its price target, citing heightened competition in the electric vehicle market.
Cryptocurrency markets also reflected broader risk aversion. Bitcoin dipped 1.3% to $82,605, while the total global crypto market cap declined 0.8% to $2.7 trillion.
