Gold price retreated significantly from its all-time high, although the decline appears limited. This price retreat comes at a time when demand for the US dollar is witnessing a modest recovery, which has led to significant volatility in global markets. However, gold continues to maintain its status as a safe haven amid ongoing concerns about the global economy.
Trade War Impacts on Gold Price
Global market concerns over US President Donald Trump’s tariffs are expected to continue to support gold prices. The trade war between the US and other countries continues to impact the global economy, making gold a safe haven for investors. The downward trend in the US dollar may also help limit losses in gold prices against the US dollar.
Gold price Amid Economic Shifts
On Friday morning, gold prices retreated to their lowest level of the day at around $2,920 per ounce. This decline comes after a period of gains, as gold had reached its highest level in the previous session. With ongoing concerns about the US President’s economic policies, gold remains in the focus of investors’ attention as a hedge against potential inflation. Despite some profit-taking in the yellow metal, there are still positive expectations that gold may continue to rise.
Reasons for the continued demand for gold
There is no doubt that one of the main reasons behind the continued demand for gold is the fear of escalation in the global trade war. Trump imposed new tariffs on steel and aluminum, as well as additional tariffs on Chinese imports, which increased economic uncertainty in the markets. Trump’s protectionist policies also threaten to raise inflation, making gold the best choice for hedging against inflationary risks.
Pressure on financial markets due to US policies
In addition, the weakness of the US dollar contributes to increasing the demand for gold. With the depreciation of the dollar, investors prefer to buy gold as an alternative investment tool. Moreover, the volatility of financial markets continues to push investors to buy gold as a means of protecting capital.
Global markets continue to be affected by US economic decisions, especially after Trump announced more tariffs. This has pushed gold prices to record levels over the past months.
In this context, US policy will likely influence global markets, driving the trend toward gold as a safe haven. Additionally, some expect the United States to cut interest rates, which could increase investor demand for gold as a safer option amid economic volatility.
Gold Trend Amidst Geopolitical Concerns
In addition to economic factors, geopolitical concerns contribute to supporting the demand for gold. Hopes for a peace agreement between Russia and Ukraine have diminished, which has increased concerns about political stability in the region. The escalation of attacks on Russian oil facilities and the use of drones could increase demand for gold as a hedge against geopolitical risks.
At the same time, the US dollar continues to weaken, falling to its lowest level since last December. This decline in the dollar boosts demand for gold, increasing its investment as a hedge against market volatility.
Technical analysis of gold: Will it continue to rise?
From a technical perspective, it appears that the price of gold may face challenges if it continues its current corrective trend. However, if the $2,900 per ounce level is broken, the precious metal could see further declines. However, any new decline could be a buying opportunity for traders who believe that the uptrend will continue.
Other precious metals markets: Silver and Platinum
Continued concerns over Trump’s protectionist policies are one of the main factors driving investors towards gold. It is worth noting that gold has been witnessing a continuous rise since the beginning of the year. It is expected that the tariffs that Trump may impose later in the year will contribute to further pressure on the markets.
As for other precious metals, the results are mixed. While silver is recording good gains, as it rose by 1.2% this week, platinum futures continue to decline. Platinum is expected to lose 3.2% during the current week, reflecting the negative effects of global economic conditions.
Copper, on the other hand, witnessed weekly losses, affected by some profit-taking after its significant rise in recent weeks. The declines in copper came at a time when the red metal was on a strong uptrend, driven by optimism over the Chinese economy and the prospects of the AI industry. However, sentiment towards China has been dampened by concerns over an escalating trade war with the US.
Will Gold price continue to rise?
Based on current trends, it seems that gold could continue to post gains in the near future. Geopolitical tensions, coupled with US economic policies, are boosting gold’s appeal as a safe haven. Given that the US economy is facing inflationary challenges that could weigh on growth, gold prices are likely to remain bullish.
