Gold prices remained near record highs despite resident Donald Trump’s delay in tariffs implementation, which prompted financial markets to move to safety.
Market activity shows that spot gold settled at $2,900 per troy ounce.
There is still a rally on the yellow metal even if it is unlikely that the United States would step in and stop the conflict between Russia and Ukraine.
Gold overcame the drop in demand for safe-haven assets when Trump alluded to potential peace talks over Russia and Ukraine. This implies that traders place a higher value on economic uncertainty than on changes in geopolitics.
Consequently, the high demand for gold reflects ongoing concerns about inflation and the Fed’s monetary policy stance. gold was predicted to increase by about 2.35 percent, continuing its seven-week winning streak.
Demand for safe havens continued to rise because of the uncertainty surrounding Trump’s trade proposals.
The Federal Reserve chairman, Jerome Powell, also affirmed in his testimony that interest rates will probably remain steady for the long term.
Gold has historically been lower due to higher yields in the U.S. Treasury market. Investors have chosen the bullion asset as a hedge because of the continued high uncertainty around global inflation.
The CME FedWatch tool showed a higher chance of rate stability through June, which increased gold bugs’ firepower.
Risk assets are strained by NATO negotiations and concerns around Ukraine, which weakens the US dollar.
President Donald Trump’s hostage ultimatum raises uncertainty and promotes demand for safe-haven investments.
Technical analysis shows that the price of gold resumed its underlying uptrend in early January after breaking out of the symmetrical triangle it had been consolidating in since the October record. Trump’s industrial sector tariffs raised concerns that domestic suppliers would be hard to find for US companies.
Long-term support for the bullion metal will come from strong central bank demand, geopolitical tensions, and expectations of a Fed rate cut thanks to China’s export restrictions on several necessary materials.
Gold prices are expected to be heavily impacted by the Federal Reserve’s monetary policy signals and any further developments in US-China trade relations, the overall trend remains bullish despite the potential for minor pullbacks with significant upside targets above the current high of $3K.
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