Prices Reach New Heights Amid U.S. Tariff Worries and Fed Dilemma
Gold prices surged to a record high on Tuesday, driven by concerns over U.S. President Donald Trump’s criticism of Federal Reserve Chair Jerome Powell, which dampened risk sentiment and drove investors towards the safe-haven bullion.
- Spot gold increased 1.4% to $3,472.49 per ounce, as of 0247 GMT, after touching a record high of $3,473.03 per ounce earlier in the session.
- U.S. gold futures firmed 1.7% to $3,482.40.
“Investors have been giving a wide berth to U.S. assets amid tariff worries and Trump-Powell dramas, which has kept gold in prime position to capitalise on the dollar’s woes,” said Tim Waterer, chief market analyst at KCM Trade.
Trump’s Criticism of Powell Sparks Concerns
Trump reiterated his call for an immediate reduction in interest rates on Monday, warning that the U.S. economy could face a slowdown, while criticizing Powell’s stance to keep rates unchanged until clarity on the inflation impact of Trump’s tariff plans.
“There remains a chance of a pullback given the rapid rate of gains on display so far this month. But there is reason to believe that buyers will be keen on gold should a pullback occur given that high economic uncertainty remains a prevailing market theme,” Waterer said.
Asian Markets Struggle to Maintain Stability
Asian stock markets struggled to maintain stability following a rapid sell-off of U.S. assets that weakened Wall Street and the dollar.
On Monday, China accused Washington of abusing tariffs and warned countries against striking a broader economic deal with the U.S. at its expense.
| Commodity | Precious Metal Price Change |
|---|---|
| Spot Silver | -0.4% ($32.57 an ounce) |
| Platinum | 0.3% ($964.78 an ounce) |
| Palladium | 1.3% ($939.50 an ounce) |
Gold, viewed as a safe-haven against economic uncertainties, surpassed the $3,300 mark last Wednesday and continued its upward trajectory, crossing $3,400 on Monday.
Market Anticipation: Fed Officials’ Speeches
Markets are eagerly anticipating speeches from several Fed officials later this week, hoping for insights into future monetary policy amid concerns about central bank’s independence.
Spot gold prices have continued to rise, driven by concerns over the U.S. economy and the Fed’s decision-making process.
Definition of Safe-Haven Assets
A safe-haven asset is an investment that provides a level of security and stability, especially during times of economic uncertainty or market volatility.
Gold is considered a safe-haven asset due to its historical association with store of value and its limited supply, making it less susceptible to price fluctuations.
Record Gold Rally
Gold prices have reached a record high, driven by the concerns over the U.S. economy and the Fed’s decision-making process.
The record high price of gold is a testament to the market’s appetite for safe-haven assets during times of economic uncertainty.
Highlights
- Spot gold increased 1.4% to $3,472.49 per ounce.
- U.S. gold futures firmed 1.7% to $3,482.40.
- Gold prices have surpassed the $3,300 mark and crossed $3,400 on Monday.
The record gold rally is a testament to the market’s appetite for safe-haven assets during times of economic uncertainty.
Investors Seek Clarity on Fed’s Monetary Policy
Investors are eagerly awaiting speeches from several Fed officials later this week, hoping for insights into future monetary policy amid concerns about central bank’s independence.
The Fed’s decision-making process has been a subject of interest for investors, as they seek to understand the central bank’s stance on interest rates and economic growth.
Gold prices continue to rise, driven by concerns over the U.S.
