Gold prices surged on Tuesday, reaching a two-week high, as U.S. trade tensions sparked a rush for safe-haven assets. Investors turned to gold after recent tariff threats from the U.S. president unsettled markets.
As of 1219 GMT, spot gold climbed 1.2%, reaching $3,374.78 per ounce. Earlier, it touched its highest level since April 22. Analysts pointed to several factors behind this steady rise.
UBS analyst Giovanni Staunovo noted that trade tensions remain unresolved. He also emphasized continued concerns about the dollar’s status as a reserve currency. These issues have maintained strong demand for gold.
In recent days, the U.S. president introduced new tariff threats. On Sunday, he announced a 100% levy on foreign-made films. He offered few details on the implementation. The next day, he promised tariffs on pharmaceutical imports within two weeks.
Meanwhile, investors are watching the Federal Reserve closely. The central bank will announce its policy decision on Wednesday. Most analysts expect interest rates to remain unchanged. However, markets will focus on comments from Fed Chair Jerome Powell.
According to LSEG data, traders are pricing in 75 basis points of rate cuts this year. The first cut may come in July. Lower interest rates reduce the cost of holding gold, which offers no yield. As a result, gold prices surge again.
Additionally, gold reached an all-time high of $3,500.05 last month. This spike followed strong central bank buying, ongoing trade concerns, and strong investor demand.
Also, Saxo Bank reported increased demand from China after a holiday break. On Monday, gold rebounded from a low of $3,200 to hit $3,287 overnight. China remains the world’s biggest bullion buyer.
Other precious metals also advanced. Spot silver gained 1.6% to trade at $33.01 per ounce. Platinum rose 2% to $978.05. Palladium increased by 1.4%, reaching $954.
In conclusion, gold prices surge as geopolitical tension, central bank moves, and economic uncertainty all fuel investor interest.
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