On Tuesday, gold prices were up by nearly $100 per ounce. The prevailing global trade war led by the United States against its major trading allies boosted investors’ desire for safe-haven assets. Spot gold advanced 0.5%, reaching $2,996.6 an ounce at 0340 GMT. This increase follows the decline seen earlier this week, which lowered prices to the lowest level since March 13.
Gold prices have skyrocketed in recent weeks. This comes on the heels of a record high of $3,167.57 set on April 3. Market analysts attribute this rebound to increased geopolitical risks. They’re looking very hard at upcoming economic data, such as the United States Consumer Price Index data due out Thursday and the Producer Price Index due out on Friday.
Jigar Trivedi, a senior analyst at Reliance Securities in Mumbai, said gold prices were recovering from a near four-week low. He stated, “Despite slipping in the previous sessions, gold is still strong and should remain on the upward trend.” This rekindled interest in gold is a perfect illustration of its world-renowned status as a safe haven asset amidst political and financial turmoil.
The increasing trade tensions have raised fears among investors about a possible global recession. Trivedi emphasized that “Escalation of the trade war could trigger a global recession, and that is driving safe-haven demand.” These dynamics make gold an attractive investment option during volatile market conditions.
On top of these favorable developments, investors are optimistic about more to come. Futures data indicate they expect close to 93 basis points’ worth of interest rate cuts by the U.S. Federal Reserve by December. The Federal Reserve will disclose the minutes of its most recent policy meeting on Wednesday. This announcement will undoubtedly tilt market forces in that direction even more.
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