Gold Prices Surge Over 6.5%, Reaching All-Time High Amid Trade War Fears:

Gold prices climbed more than 6.5% this week, reaching an all-time high of $3,237 per troy ounce on Friday. This marks the strongest weekly performance for gold since the early months of the COVID-19 pandemic. Investors are turning to gold amid growing economic instability triggered by new tariffs announced by US President Donald Trump, as reported by the Financial Times.

Declining Trust in US Treasuries and Dollar Fuels Gold Demand

The market downturn has caused significant losses in US stocks and Treasury bonds, both usually considered safe investments. The US dollar fell to its lowest point in three years against the euro, pushing investors toward gold — a traditional hedge against currency volatility.

Trade Tensions Escalate Following China's Tariff Announcement

China responded to US tariffs by announcing a 125% tariff on American imports. Analysts say this has intensified fears of a prolonged trade war. As a result, investors are seeking protection through gold to guard against recession, rising bond yields, and broader financial risks.

Institutional and Central Bank Demand Strengthens the Trend

Investor demand is being bolstered by increased buying from central banks and institutional investors. Gold-backed exchange-traded funds (ETFs) recorded their highest inflows since 2020 during the first quarter. Many central banks, especially in emerging economies, are purchasing more physical gold to reduce reliance on the US dollar.

China Leads Global Demand for Physical Gold

In China, domestic gold demand is rising sharply. Buyers are paying more than international market rates, showing strong interest in the metal. This trend highlights deepening concern in Asian markets about financial instability and currency risks.

UBS Raises 12-Month Gold Forecast to $3,500

Reflecting this strong momentum, UBS has increased its 12-month price forecast for gold to $3,500 per ounce. This marks the bank's second upward revision this year, driven by ongoing central bank and institutional interest.

Gold Reemerges as the Preferred Safe Haven

With traditional assets like the US dollar and Treasuries under pressure, investors are returning to gold as a reliable store of value. As doubts grow over the US administration’s trade strategy, the trend of increased gold buying is expected to continue in the coming months.