Tariff-induced uncertainties may solidify gold’s safe-haven appeal

LONDON / ISTANBUL

US President Donald Trump’s sweeping reciprocal tariffs, announced April 2, led to selling pressure in gold but it may be short-lived as the demand for the commodity is to remain strong due to tariff-induced uncertainties, experts told Anadolu.

Gold fell more than 2% last Friday after the markets were met with Trump’s reciprocal tariffs. After reaching an all-time high of $3,167.88 per ounce on Tuesday, gold fell to $3,010.

Experts believe investors took partial profits from their gold positions to compensate for the losses in the stock markets. Tariff uncertainty is likely to continue to increase and solidify the haven appeal of gold and central bank purchases are expected to contribute to gold demand.

Juan Carlos Artigas, global head of research at the World Gold Council, stated that gold prices have seen a consistent positive trend since the year started and it is normal for gold to experience price consolidation after the rapid rises in recent months, but there is still uncertainty over the ultimate impact of the tariffs.

“Against this backdrop, some market participants may have taken partial profits on previous gold positions; in addition, the US dollar has rebounded over the past few days, and bond yields have increased; these may have created additional headwinds for gold as they are commonly used, especially in the short term, as inputs in gold price models,” he said.

“Our analysis suggests, however, that there are strong fundamentals drivers that may support investment demand in the current environment, and that the pullback may also bring some respite to retain consumer demand,” he noted.

“Following a consistent upward trajectory for the past few months, many investors may welcome the recent pullback, as evidenced by the fact that gold remains one of the best performing asset classes—up 14% since the start of the year at the time of writing.”

Artigas added that the current environment may see gold prices experience headwinds, profit-taking and short-term reactions.

Ewa Manthey, commodities strategist at ING Think, said gold lost some value after the sell-offs in the stock markets following the reciprocal tariff announcements.

“We think gold’s selloff will be short-lived as trade and tariff uncertainty is likely to continue to bolster its safe-haven appeal,” she said. “With Trump in the White House, uncertainty and unpredictability are running high. And gold will continue to benefit from this environment.”

“Central banks buying, in a bid to diversify reserves amid Donald Trump’s unpredictable trade policy, is also expected to support gold prices looking ahead,” she noted, mentioning that the People’s Bank of China (PBoC) added gold to its reserves for about 10 months in a row, and five consecutive times in March alone, despite the high prices.

“We believe central banks will continue to buy gold as geopolitical tensions and the economic climate will continue to push them to increase their allocation towards safe-haven assets, providing a further tailwind to gold prices,” she added.