Gold Hits New Record as Prices Breach $3,200

Prices could hit $4,000 by the end of this year, an investment expert said.

A worker polishes gold bullion bars at the ABC Refinery in Sydney, Australia, on Aug. 5, 2020. David Gray/AFP via Getty Images

The price of gold continued to shoot up on Friday, exceeding the $3,200 per ounce level as investors remain concerned about the economic consequences of the ongoing tariff conflict.

Spot gold prices hit a record high of $3,244.23 per oz. on early Friday trade and was trading at roughly $3,240 as of 9:35 a.m. ET, up by around 2 percent for the day. This is the third straight day of strong price gains.

On April 2, President Donald Trump announced a baseline tariff of 10 percent on all imports as well as reciprocal tariffs on several nations depending on the trade barriers they set up against the United States.

On Wednesday, the president announced a 90-day pause on the reciprocal tariffs, saying that more than 75 nations wanted to make trade deals with the United States in response to the tariffs.

However, the Trump administration maintained a 145 percent tariff on Chinese goods, with China now applying a 125 percent tariff on imports of U.S. goods.

“At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other countries, is no longer sustainable or acceptable,” Trump said.

Trade tariffs and related conflicts have created an environment of uncertainty, resulting in investors moving to the bullion as a safe haven investment.

Gold prices had fallen after the April 2 tariff announcement. In an April 8 post, ING Bank said the selloff would be a “short-lived” trend.

After flattening out on April 8, spot gold prices have risen by more than 8 percent.

“We believe central banks will continue to buy gold as geopolitical tensions and economic uncertainty push them to increase allocations toward safe-haven assets. This should provide a further tailwind to gold prices looking ahead,” the bank said.

In an April 10 podcast, Peter Schiff, chief economist at wealth management services company Europac, said that while he admires Trump’s goal to reduce the trade deficit, imposing tariffs could lead to economic weakness in the United States while burdening consumers and businesses.

Schiff predicts gold mining companies are set to see “great” second-quarter earnings.

The companies were “already going to have great earnings in Q1, but I think they’re going to blow the doors off in Q2 because I think gold is going to hang out near $3,100 or higher and oil is going to be slow to recover. So in the meantime, the profits are going to be huge for these gold mining companies.”

The White House defended Trump’s tariff policy, citing an analysis by the Coalition for a Prosperous America that found that Trump’s tariffs in the first term had strengthened the U.S. economy and led to the reshoring of production in various sectors in the country.

“Despite the rhetoric from politicians and the media, studies have repeatedly shown tariffs are an effective tool for achieving economic and strategic objectives—just as they did in President Trump’s first term,” the White House said.

“For the first time in decades, the United States will see fair trade as President Donald J. Trump announces tariffs to level the playing field for American workers and businesses.”

Gold Investments

According to a report from the World Gold Council (WGC), physically backed gold ETFs “reported strong inflows in March” globally, driving up first-quarter inflows to $21 billion, which was the “second highest quarterly level in dollar terms.”

“North America (61%) and Europe (22%) represented the bulk (83%) of net inflows in Q1. Asia contributed 16% – impressive given that the region’s total assets under management (AUM) only account for 7% of the global total,” the report said.

Meanwhile, global central banks reported 24 tons of net purchases of gold in February, as “appetite for gold continues to be robust,” WGC said.

The Polish central bank led in terms of net purchases, with institutions from China, Turkey, Jordan, Qatar, and the Czech Republic also being net buyers of the bullion for the month.

Yvonne Blaszczyk, CEO of precious metals investment company BMG Group Inc., is predicting gold prices to hit $4,000 per oz. by the end of this year, according to an April 8 post.

“Gold is going to go up in value, the price is going to rise dramatically, and it will continue [to] rise for [a] variety of reasons,” she said.

“Gold has a basic ability to withstand any kind of a turmoil, whether it is financial, geopolitical, or any cataclysm,” she said. “I follow central banks, and they are accumulating gold. That’s a very significant factor in understanding where gold is.”