Gold Prices Rise After Trump’s Latest Auto Tariffs Shake Markets

Gold prices surged on Thursday, March 27 after US President Donald Trump’s latest round of tariffs on auto imports. Trump, on Wednesday, announced a 25 per cent tariff on imported cars and light trucks, starting next week, which is expected to escalate the global trade war.

In the domestic market, Gold April futures contracts at MCX surged Rs 495 or 0.56 per cent to trade at Rs 88,133/10 grams on Thursday morning. The contract is trading near its record high of Rs 89,796/10 grams, hit on March 20.

In the international market, Gold April futures in Comex traded higher by $29.5 or 0.98 per cent at $3,052 per ounce, sitting near its record high of $3,057.21, touched on March 20 pushed by Trump’s tariff policies.

Kaynat Chainwala, AVP – Commodity Research, Kotak Securities, explained that Trump’s move fueled fears of a trade war and led to an increased demand for gold as a safe-haven asset.

Adding to this, Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities, said, new threats from the US towards the Eurozone over potential support for Canada have heightened market risks, further boosting safe-haven demand.

“Concerns about rising tensions with key trading partners intensified, especially with Trump suggesting that additional tariffs could be imposed on the European Union and Canada if they coordinated to ‘do economic harm’ to the US. This statement raised alarms of further disruptions, even before his reciprocal tariffs come into play on April 2,” Chainwala said.

While Trump tried to reassure markets by stating that some of the reciprocal duties set to be announced next week would be "very lenient," the uncertainty surrounding the tariffs has kept markets on edge, she added.

Gold Outlook 2025

According to Chainwala, “With trade disputes and geopolitical risks escalating, gold is poised to shine even brighter, potentially pushing prices to record highs as the global economic landscape grows more unpredictable.”

Meanwhile, 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.

A day earlier, Bank of America (BofA) too raised its gold period average forecasts for this year and next. BofA now expects gold to average $3,063 per ounce in 2025 and $3,350 per ounce in 2026, up from its previous forecasts of $2,750 and $2,625, respectively.

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