Gold prices surged to a record high in Asian trade on Wednesday, driven by heightened demand for safe-haven assets amid ongoing geopolitical instability in the Middle East and concerns over potential trade tariffs.
Investor sentiment remained cautious ahead of the Federal Reserve’s meeting, scheduled to conclude later Wednesday. The Fed’s decision is expected to provide further insight into the state of the U.S. economy, with the market anticipating no immediate changes in monetary policy.
Over the past week, gold prices rose significantly as risk appetite diminished due to U.S. President Donald Trump’s persistent threats of increased trade tariffs and growing concerns over the possibility of a U.S. recession. This, coupled with a weakening U.S. dollar, further bolstered gold’s appeal.
Spot gold increased by 0.1% to $3,039.00 per ounce, marking a new record, while gold futures for May delivery also rose 0.1%, reaching $3,046.12 per ounce.
While the Bank of Japan’s meeting on Wednesday resulted in no significant changes, the Bank of England is expected to maintain its current interest rates later in the day.
Gold prices hit their highest point on Tuesday following the collapse of the Israel-Hamas ceasefire, which raised tensions in the region. Ongoing developments in the Russia-Ukraine conflict further contributed to the demand for safe-haven assets.
Fed’s Rate Decision and Economic Outlook
The Federal Reserve is widely expected to keep interest rates unchanged at 4.5% after its meeting, amid persistent economic uncertainty under President Trump’s administration. The Fed has repeatedly signaled concerns about the short-term economic outlook, with limited room for further rate cuts in the near future.
The central bank is also set to release its updated economic projections, which will offer a clearer picture of its expectations for the U.S. economy moving forward.
Trump’s fluctuating trade policies, particularly his stance on tariffs against Canada and Mexico, have added to the uncertainty, with fears of further escalation. The President has warned of higher tariffs in early April, heightening concerns that these measures could disrupt global trade, spur U.S. inflation, and hinder domestic economic growth.
Precious Metals and Industrial Metals
Other precious metals experienced slight declines on Wednesday after a period of significant gains. Platinum futures dropped by 0.4%, reaching $1,016.90 per ounce, while silver futures fell by 0.5%, settling at $34.55 per ounce.
In contrast, copper prices held steady following several strong trading sessions. Benchmark copper futures on the London Metal Exchange dropped by 0.1% to $9,901.85 per ton, while May copper futures edged up by 0.3% to $5.0213 per pound.
The outlook for copper remains positive, supported by renewed optimism about China’s economic growth. China recently introduced additional fiscal measures aimed at boosting private consumption and stimulating its economy, which is expected to drive demand for copper.
However, President Trump’s plans to impose tariffs on copper could restrict U.S. supplies in the near term, adding further complexity to the market dynamics.
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