Gold price (XAU/USD) shot to a fresh record high during the Asian session on Thursday as investors rushed to take refuge in traditional safe-haven assets amid the risk-off impulse. US President Donald Trump announced sweeping reciprocal tariffs on Wednesday evening, sparking concerns about global economic growth and a recession in the US. This, in turn, sparked a severe risk-off move, which is evident from a sea of red across the equity markets, and provided a strong boost to bullion.

Meanwhile, the anti-risk flow, along with the growing acceptance that a tariff-driven US economic slowdown, would force the Federal Reserve (Fed) to resume its rate-cutting cycle soon and trigger a steep decline in the US Treasury bond yields. This, in turn, dragged the US Dollar (USD) back closer to a multi-month low touched in March and further benefited the non-yielding Gold price. That said, extremely overbought conditions keep a lid on any further appreciating move for the XAU/USD pair.

US President Donald Trump imposed a 10% baseline tariff on all imports and higher duties on some of the country's biggest trading partners, sending shockwaves through global financial markets. In response, China's Commerce Ministry stated that it will resolutely take countermeasures to safeguard its rights and interests.

The developments raise the risk of a widening trade war, which could upset global free trade and impact negatively on the world economy. This, in turn, boosted demand for traditional safe-haven assets. Apart from this, the emergence of heavy US Dollar selling pushes the Gold price to a fresh record high on Thursday.

Source : FXStreet