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Gold prices rise as concerns grow over Trump's tariffs

Gold prices rose Thursday, as U.S. car tariffs escalated global trade tensions in advance of the April 2 deadline to reciprocate tariffs by the world's biggest economy.

As of 0247 GMT, spot gold increased 0.4% to $3.030.47 per ounce. U.S. Gold Futures rose 0.5% to $3.036.00.

The U.S. president Donald Trump announced on Wednesday a 25% import tariff for cars and light trucks, which will take effect next week. This is a further escalation of the global trade conflict.

Investors were concerned that Trump's tariffs would fuel inflation, slow the economy and increase trade tensions.

On March 20, concerns over Trump's trade policies pushed gold to an all-time high of $3.057.21.

Aakash Doshi is the global head of SPDR ETF Strategy and expects that gold will surpass $3,100 by the end of the second quarter. "The market could push up another 8%-10% by the end-2025, if current macro- and physical-market tailwinds continue for the yellow metal."

Goldman Sachs on Wednesday raised its end-2025 gold price forecast to $3,300 per ounce from $3,100, citing stronger-than-expected ETF inflows and sustained central bank demand.

Investors are awaiting the U.S. data on personal consumption expenditures, due Friday. This could provide more insight into the U.S. rate path.

The U.S. Central Bank held the benchmark interest rate constant last week but hinted that it may cut rates in later years. In a low-interest-rate environment, non-yielding gold tends to flourish.

Neel Kazhkari, president of the Minneapolis Federal Reserve Bank, said that although the U.S. Central Bank has made significant progress in bringing down inflation, "we still have work to do" before inflation reaches the Fed's target of 2%.

Spot silver fell 0.1%, to $33.69 per ounce. Platinum rose 0.1%, to $975.25. Palladium dropped 0.4% to $864.56.

(source: Reuters)