Gold maintains its winning streak above $3025 (~Rs 88500) as Trump’s tariffs are projected to exacerbate inflation and economic turmoil.

Gold reached fresh domestic market highs of $2955 (~Rs 86800), driven by rising global trade tensions and safe-haven demand. President Donald Trump warned of further taxes on EU goods on Wednesday, following retaliation by the EU and Canada against existing US trade restrictions.

Gold markets are in a tug-of-war at highs, with bears focusing on a potential ceasefire deal in Ukraine and bulls anticipating key U.S. inflation data to gauge the Federal Reserve’s interest rate path amid trade tensions and economic slowdown fears.

Gold prices are consolidating between $2885 and $2935, spurred by a weaker US dollar and safe-haven flows as fears about the US economy grow amid growing trade tensions.

Investors are concerned that Trump’s tariffs would hinder US economic growth and push the Federal Reserve to slash interest rates multiple times before the end of the year.

U.S. President Donald Trump imposed new 25% tariffs on imports from Mexico and Canada on Tuesday, as well as a doubling of duties on Chinese goods to 20%, igniting trade wars that could stifle economic growth and raise prices for Americans still reeling from years of high inflation.

Markets remain risk-averse as a global tariff war appears certain. US President Donald Trump reaffirmed 25% tariffs on Canada and Mexico, which will go into force on Tuesday, and has already signed an order to hike China tariffs to 20%.