Gold experienced a surge, approaching record highs, driven by a confluence of factors including escalating trade tensions, anticipation of interest rate cuts, central bank purchases, and robust demand for gold-backed exchange-traded funds. Market participants reacted to the threat of new US tariffs and weaker than expected economic data.
- Gold rose above $3,130 per ounce.
- Risk aversion due to potential US tariffs fueled the increase.
- President Trump hinted tariffs would impact many countries.
- Expectations of interest rate cuts supported gold prices.
- Central bank buying contributed to the positive momentum.
- Strong demand for gold-backed ETFs was observed.
- The Chinese gold ETF added 233,000 ounces of notional bullion in one week.
- Recent U.S. economic releases showed weak jobs data and a poor manufacturing report.
- Investors are focused on the upcoming nonfarm payroll report.
The convergence of macroeconomic uncertainties and supportive market dynamics suggests a favorable environment for gold. Investor concerns regarding trade disputes and economic slowdown, coupled with expectations of accommodative monetary policy, could continue to bolster demand for gold as a safe-haven asset. Central bank activity and ETF inflows may further amplify these effects, potentially leading to sustained or increased price levels.