Gold Price Hits $3,157 Per Ounce, Sets New Intraday Record
Copper Price Surpasses $5.10, Highest Since May Last Year
Stockpiling in Preparation for Tariff List
Metal prices including gold, steel, and copper are soaring simultaneously amid uncertainties surrounding U.S. President Donald Trump's tariff policies and concerns over resulting supply shortages. Analysts suggest that Europe's new defense plans and Ukraine's post-war reconstruction projects are also stimulating metal demand. In the market, there is a growing tendency to prefer safe-haven assets like gold over U.S. stocks.
On March 31 (local time), the spot price of gold on the New York Commodity Exchange (COMEX) closed at $3,157.40 per ounce, up 1.38% from the previous trading day. During the session, it rose to $3,162, setting a new all-time high. The June delivery gold futures closing price also surpassed the previous record, closing at $3,149.90 per ounce on the New York Mercantile Exchange. On the same day, June delivery gold futures on the New York Commodity Exchange closed at $3,150.40 per ounce.
This is interpreted as a result of heightened market anxiety due to the Trump administration's persistent tariff attacks, concerns over inflation, and the possibility of a market downturn. Central banks worldwide joining gold purchases in anticipation of a potential decline in the dollar's value also pushed gold prices higher.
The New York Times (NYT) noted, "Gold prices traded at about $3,150 per ounce on Monday (March 31), setting another record high," adding, "Investors often turn to gold during turbulent times. This signals that investors are worried about economic growth."
Earlier, President Trump announced on February 12 that a 25% tariff would be imposed on imported steel and aluminum to promote domestic production. On April 2, he also threatened retaliatory tariffs, called reciprocal tariffs, on all trading partners and hinted at imposing tariffs on copper. Investment banks such as Goldman Sachs and Citigroup expect a 25% tariff on copper by the end of the year. Consequently, price fluctuations were anticipated not only in steel and aluminum but also in metals like gold, silver, and copper. Companies increased short-term stockpiles to mitigate supply chain risks, and with copper production not rising significantly, movements to send copper to the U.S. in advance contributed to expected supply shortages in the global spot market.
George Heffel, an analyst at BMO Capital Markets, said, "U.S. consumers are stockpiling raw materials ahead of imminent tariffs. This trend started in January and continued through February and March, as evidenced by a sharp increase in U.S. imports of copper semi-finished products including rods, cables, pipes, sheets, powders, and films."
Market prices are also soaring. Aluminum prices surged 80% in the U.S. Midwest, and the price gap for hot rolled coil between the U.S. and Europe increased by 75%. U.S. copper prices also hit record highs. U.S. copper futures closed at $5.183 per pound on March 25, surpassing the previous high recorded in May last year, and closed at $5.1125 per pound on March 28. This represents a 28% increase since the beginning of the year. The Wall Street Journal (WSJ) contrasted this with the London Metal Exchange copper price, the international benchmark, which rose 13% to about $4.44 per pound, calling it an "unprecedented price gap."
Chinese media Caixin analyzed, "As the U.S. economy shows signs of stagflation (persistent inflation amid economic stagnation), the surge in metal prices indicates that investors are reallocating assets to hedge against inflation. With the U.S. stock market entering a correction phase, more funds are flowing into the commodity market."
Meanwhile, the U.S. stock market is struggling. The WSJ reported that the U.S. stock market experienced its worst first quarter since 2022. The Dow Jones Industrial Average fell 1.28%, the large-cap-focused S&P 500 dropped 4.59%, and the tech-heavy Nasdaq plunged 10.42% in the first quarter, as the exodus to European markets accelerated due to the impact of President Trump's tariff bomb.
The first quarter was particularly harsh for large tech stocks. During this period, Tesla plummeted 35.85%, Nvidia fell 19.29%, and Apple, the largest market cap company, slid 11.30%. The WSJ stated, "As the Trump administration wages tariff battles with America's largest trading partners, analysts have lowered economic growth forecasts and raised inflation estimates. Investors are shifting investments to Europe and beyond, where new spending plans could impact the sluggish economy."
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