Amid a fresh wave of geopolitical tensions, gold prices in the United Arab Emirates have hit a record high, The National has reported. The precious metal traded at $3,080.76 an ounce on Friday, its highest level on the country’s market, marking its fourth consecutive week of steady gains. The move came as investors fretted about the potential for a global trade war to escalate following US President Donald Trump’s proposed tariffs on imported cars and components.
Asian stock markets were among the worst-hit, with indices plunging. Japan’s Nikkei fell more than 2%, led by a plunge in Toyota and Honda shares, while South Korea’s benchmark index fell 1.3% to a two-week low. The only exception was Hong Kong’s Hang Seng Index, which rose 0.6% despite the threat of tariffs. According to Fawad Razakzada, an analyst at City Index, gold is strengthening its position as a safe-haven asset amid growing market volatility: “The trade war is escalating and we are entering a phase of decisions that could dramatically change market expectations.”
Trump’s tariff policy is adding pressure
The situation in financial markets has worsened after new announcements by Donald Trump. On April 2, the US president announced his intention to impose a 25% tariff on all imported cars manufactured outside the United States. This step, he said, is designed to revive domestic production, but at the same time has caused a chain reaction in the global market.
In addition to the auto industry, the new tariffs also affected steel and aluminum — key materials for construction, energy and industry. The new tariffs also hit energy products from Canada, not covered by the USMCA agreement, as well as goods from China, with an additional 10% duty imposed on top of the existing one. In response, Canada announced mirror duties on $22 billion, and China and the EU also announced countermeasures. Export restrictions for Mexico are currently suspended.
The reaction of financial institutions was not slow. Goldman Sachs lowered its forecast for US GDP growth in 2025 from 2.4% to 1.7%, citing growing economic uncertainty. JP Morgan increased the probability of a US recession to 40%, and Pimco analysts increased it to 35%. All this reinforces the wave of concerns among investors about the consequences of the White House’s trade policy.
Gold is back in the spotlight as a protective asset
Amid heightened volatility and global economic threats, investors are returning to traditional protective instruments, among which gold remains the leader. In 2024, the price of the precious metal has already increased by 16%, which was facilitated by both massive purchases by central banks and active infusion of funds into ETFs backed by gold.
Analysts at leading banks are revising their forecasts. Goldman Sachs has increased its expected price to $3,300 per ounce by the end of the year, citing increased demand from institutional investors. “Gold remains the most reliable hedge against Trump’s tariff policy,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
This opinion is supported by Samer Hasn, chief analyst at XS.com, who noted that the increase in the value of gold is directly related to the deterioration of economic expectations in the United States and pessimism among both consumers and businesses. In addition, the weak recovery of the Chinese economy and the threat of a decrease in exports only increase the attractiveness of gold as a universal haven asset, providing protection in times of global turmoil.