Gold prices extended their gains on Wednesday, April 2, following a record high in the previous session, as investors sought the comfort of the safe-haven metal in anticipation of the potential impact of US reciprocal tariffs.

Spot gold was up by 0.2 per cent at $3,116.72 an ounce, as of 0500 GMT. Bullion touched an all-time high of $3,148.88 on Tuesday.

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US gold futures were steady at $3,116.72.

“The main reason for these successive record highs has been safe-haven buying, and the geo-political uncertainty underpinning this shows no sign of letting up,” said Philip Newman, managing director of Metals Focus.

Economic slowdown

A US economic slowdown, potential rise in inflation, and interest rate cuts could set the stage for gold to reach $3,300 in the coming months, Newman said.

Suspense surrounded the market ahead of the US tariffs set to be imposed later in the day, which President Donald Trump has called “Liberation Day.”

Trump’s tariff’s

Trump’s tariff policies could flare up inflation, slow economic growth and escalate trade disputes.

Gold, a hedge against global instabilities and inflation, thrives in a low-interest-rate environment.

The White House confirmed new tariffs will be imposed, though it provided no details on the size or scope.

Bullion’s rally has also been fuelled by strong central bank demand, expectations of interest rate easing by the Federal Reserve and increased flows into gold-backed exchange traded funds.

Market situation

“The market could test $3,400/oz over the next 9 months in a bull case scenario,” said Aakash Doshi, global head of gold strategy at State Street Global Advisors.

Fed officials are concerned that employment could slip, but the threat of tariff-driven inflation limits their ability to do anything about it.

Markets await ADP employment report due later in the day, and non-farm payrolls due on Friday.

Visa has offered Apple roughly $100m to take over the tech giant’s credit card partnership from Mastercard, the Wall Street Journal reported on Tuesday (April 1), citing sources familiar with the matter.

Visa has made a bold push to secure the Apple Card, offering an upfront payment typically reserved for the largest card programs, WSJ reported.

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Visa declined to Reuters’ request for comment.

American Express is also trying to unseat Mastercard to win the Apple card. Amex is looking to become the card’s issuer as well as the network, the report said, citing the sources.

Goldman Sachs and Apple, which launched their credit card partnership in 2019 with Mastercard as the payment processor, have ended the alliance, according to a report from November 2023.

MGX and Silver Lake are new minority shareholders in Khazna Data Centers, alongside majority stakeholder G42.

The investment marks a significant development in Khazna’s expansion, reinforcing its position as one of the fastest-growing hyperscale data centre networks globally.

As part of the transaction, e& has exited its investment in Khazna but will continue to be a key business partner.

The company has played a critical role in Khazna’s success and will maintain its collaboration in delivering AI-grade connectivity and advanced digital infrastructure solutions.

Khazna eyes expansion with support of investors

“Our ambition is to enable the growth of artificial intelligence and digital economies by delivering data centres that are designed to handle the high-density computing requirements essential for the applications powering the future economy,” said Hassan Alnaqbi, CEO of Khazna Data Centers.

“With G42, and now the additional support of MGX and Silver Lake, two leading global investors, we are well-positioned to accelerate our global expansion plans and enhance our AI-optimised capabilities for a new, digitised world.”

With the backing of G42, MGX, and Silver Lake, Khazna is set to further expand its footprint in key markets, supporting the growing demand for cutting-edge data centre solutions.

Walking through a Michigan plant past whirring robotic arms and flying sparks, Swamy Kotagiri, the CEO of Canada-based auto supplier Magna reflected on how he is trying to “control the uncontrollable” in the midst of industry-shaking tariffs.

“We’ve had a series of black-swan events,” Kotagiri said. “Our industry really prospers with certainty and cadence and stability. And that’s what’s been missing in the last four years.”

Read: Trump hits Canada, Mexico, China with steep tariffs

The vastness of Magna’s facility in Michigan underscores its role as a key cog in the intricate global auto supply chain. The company has 59 facilities in the United States, 50 in Canada, and another 33 in Mexico, part of the legacy of the 1990s North American Free Trade Agreement that produced a highly intertwined system of sending parts from one country – and then back again – to produce cars in some of the world’s largest markets.

But Kotagiri and other leaders of auto companies are now facing an upended industry. President Donald Trump’s 25 per cent tariffs on foreign auto imports announced at the end of March are expected to raise consumer prices, reduce demand and hit job growth. Magna, with more than 170,000 employees across 28 countries, dwarfs most of its large customers, including the likes of Ford, General Motors and Toyota.

Speaking just hours before Trump called for the 25 per cent tariffs, Kotagiri said there was no “easy way to absorb this,” saying much of the cost would be passed on to consumers. Trump’s levies are expected to add thousands of dollars in cost per vehicle and billions for automakers and suppliers, analysts say.

‘Flexibility is key’

Magna has already weathered union strikes, a semiconductor shortage and lower-than-expected EV demand. In the face of tariffs, Kotagiri said Magna is trying to be as flexible as possible, including at its EV structures facility in St. Clair, Michigan, where it cranks out battery enclosures for vehicles like GM’s Hummer and Silverado EV. If needed, the supplier can reprogram those swinging robotic arms to assemble frames or engine cradles, Kotagiri said.

“The world changed,” Kotagiri said. “Flexibility is key. We need to have the footprint, the capacity and the expertise to help.”

But its success may also depend on smaller suppliers, who are likely even more distressed.

“If you talk to small and mid-sized suppliers that support, like a Magna, I mean, talk about panic,” said Laurie Harbour, whose team focuses on automotive suppliers at advisory firm Wipfli. “Their cost has gone up so much and the revenues are still so soft,” she said, adding that it is “putting pressure on their viability as a business.”

Massive companies like Magna also have to trace where their products land and how many times they cross borders. Some suppliers surprisingly don’t have complete visibility into this, Harbour said.

There may be more demand for Magna’s US business as automakers expand production stateside to avoid tariffs. Last month, Hyundai announced a $21bn investment in the United States, and supplier Lear said it could expand as well. On the other hand, S&P Global Mobility estimates that the rising cost of autos could sap US sales, cutting annual vehicle deliveries by more than 1 million from its current 16 million.

For new growth, Magna is looking in the same direction as many others – China, the world’s largest car market. Magna’s China business accounted for 13 per cent of the company’s overall revenue, where it has 69 manufacturing facilities that employ more than 30,000 people

When Chinese businesses “start thinking of either exports or coming to Europe or other parts of the world, we believe we have the seat at the table,” Kotagiri said.

US President Donald Trump is planning to visit Saudi Arabia as early as May to sign a major investment agreement, marking his first foreign trip of his second term. Stops in Qatar and the UAE are also expected.

“It could be next month, maybe a little later,” Trump told reporters in the Oval Office earlier this week.

Sources familiar with the matter said mid-May is under consideration for the visit, according to Reuters. Trump made Saudi Arabia and Israel his first overseas stops during his initial term in 2017.

The president said the trip will centre on securing more than $1tn in investment into the US economy, including large-scale military equipment purchases.

“Tremendous jobs will be created in those two or three days,” he said.

He indicated that similar agreements could be signed in Qatar and the UAE.

The planned tour underscores Trump’s push to strengthen economic and geopolitical ties with key Gulf partners early in his second term.

In January, Trump asked Saudi Arabia to spend upwards of $1tn in the US economy, over four years, including purchases of military equipment.

This was followed by the UAE last month announcing a commitment to a 10-year, $1.4tn investment framework in the United States after top UAE officials met with President Trump.

The White House said the investment framework would “substantially increase the UAE’s existing investments in the US economy” in AI infrastructure, semiconductors, energy, and manufacturing.