Gold prices saw a slight increase on Wednesday as investors sought the security of the precious metal in anticipation of potential U.S. reciprocal tariffs, which could have significant implications for global trade and economic growth.
As of 0602 GMT, spot gold was up 0.3% at $3,118.29 per ounce, having earlier touched an all-time high of $3,148.88 on Tuesday. Philip Newman, managing director at Metals Focus, attributed the rise to safe-haven buying amid ongoing geopolitical uncertainty. “The main reason for these successive record highs has been safe-haven buying, and the geopolitical uncertainty underpinning this shows no sign of letting up,” Newman said.
Looking ahead, Newman suggested that factors such as a potential U.S. economic slowdown, higher inflation, and possible interest rate cuts could push gold prices to $3,300 in the coming months.
The market was also on edge as President Donald Trump’s much-anticipated tariff announcement approached, set for 2000 GMT. The White House confirmed that new tariffs would be imposed, though the details regarding their size and scope remain unclear. Trump’s tariff policies could fuel inflation, slow economic growth, and escalate trade disputes, all of which contribute to gold’s appeal.
In addition to safe-haven demand, gold’s rally has been supported by strong central bank buying, expectations of further rate cuts by the Federal Reserve, ongoing geopolitical instability in the Middle East and Europe, and increased flows into gold-backed exchange-traded funds (ETFs). The metal is widely regarded as a hedge against political instability and inflation.
Aakash Doshi, global head of gold strategy at State Street Global Advisors, highlighted the potential for further price increases, stating, “The market could test $3,400/oz over the next 9 months in a bull case scenario.”
Federal Reserve officials are closely monitoring employment data, particularly with the threat of tariff-driven inflation, which limits their ability to act decisively. The market is also awaiting key economic reports, including the ADP employment report later in the day and the non-farm payrolls data due on Friday.
In other precious metals, spot silver rose 0.3% to $33.85 per ounce, platinum gained 0.4% to $983.74, and palladium increased by 0.4% to $987.56.
As markets await further developments on tariffs and economic indicators, gold’s status as a safe-haven asset remains firmly in focus.
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