Gold prices rose slightly on Wednesday, as market participants braced for U.S. President Donald Trump’s comprehensive plans for-for-tat tariffs, which they fear could exacerbate inflation and hamper economic growth.
Spot gold rose 0.2% to $3,026.38 an ounce, as of 07:21 GMT. US gold futures rose 0.1% to $3,030.10.
Sonny Kumari, commodities strategist at ANZ Bank, said: There are real concerns about US economic growth and inflation. The U.S. is likely to face an inflationary recession, and this could support prices.” The focus is on possible-for-tat tariffs that the US administration may adopt on April 2.
Trump’s tariff policies are likely to be inflationary, which could slow economic growth and exacerbate trade tensions.
U.S. consumer confidence fell to its lowest level in more than four years in March, as households feared a recession and higher inflation caused by tariffs.
Slight rise in the price of gold
The price of gold, which is a hedge against geopolitical and economic instability, has risen more than 15% so far this year, hitting an all-time high of $3,057.21 on March 20. A number of Fed officials are scheduled to speak later in the day. Markets also await US personal consumption expenditure data on Friday for clues on monetary policy.
Non-yielding gold thrives in a low-interest rate environment.
“We expect the price of gold to reach $3,200 by September,” Kumari said, adding that any hawkish comment from the Federal Reserve could be a factor in slowing the rise in the price of gold.
The United States on Tuesday reached agreements with Ukraine and Russia to halt their naval attacks and target energy targets, as Washington agreed to press for the lifting of some sanctions on Moscow.
Gold prices exceed $3,000 as demand grows
In the middle of this month, gold prices exceeded a new psychological high of $3,000 an ounce, hitting new historic highs of just under $3,100 an ounce. The accumulation of supportive factors continues to contribute effectively to the valuation, with only a slight decline observed.
Factors favoring buyers mainly include global uncertainty surrounding the possibility of a tariff war, ongoing geopolitical risks in Ukraine and the Middle East, and market expectations that the Federal Reserve will start cutting interest rates as early as June, putting downward pressure on the US dollar. Also striking are the movements of physical gold, which – especially in the case of ETFs – continue their positive trend, indicating the continued accumulation of this commodity.
Analysis of recent movements in the price of gold, it is clear that investors still treat this asset as a so-called “safe haven” to which capital flows during periods of increased global risk aversion. This has been the case since January of this year, when a new administration took office in the United States, and with each passing week, its subsequent moves raise more questions rather than clarify.
Investors are increasingly vulnerable as a result of the resumption of offensive operations in the Gaza Strip and the slow pace of negotiations between Washington, Moscow and Kiev, where there are currently no signs of a permanent truce. These factors create ideal conditions for continued price appreciation, which could ease if efforts are made to calm conditions in several regions – although this seems unlikely at the moment.
On the demand side, ETFs, as well as central banks, play an important role. After strong purchases in February (+72 tonnes by US funds), this trend continued into March.
Gold price is trending higher as copper rises and Ukraine news
Gold (XAU/USD) is heading at $3,020 at the time of writing on Wednesday, turning this week’s performance positive after its initial decline on Monday. The precious metal is being bought in conjunction with copper rising to an all-time high. Copper is getting a lot of attention after U.S. President Donald Trump said on Tuesday that the U.S. would implement tariffs on copper in the coming weeks, a much sooner date than markets expected.
At the same time, a major danger concerns Ukraine, where a Black Sea ceasefire agreement is on the table. Ukrainian President Volodymyr Zelensky was quick to support the breakthrough, stressing that his country is ready to abide by it immediately.
Gold sees how rising copper prices lift the price of entire precious metals. This is a good start from the easing of-for-tat tariff concerns seen on Monday. We expect to test this week’s high, near $3,036, before reaching a historic high of $3,057.
On the plus side, the daily R1 resistance comes in at $3,034, coinciding with this week’s high at the moment. At the top, the R2 resistance at around $3,049 coincides with Friday’s high. This means that this level represents a strong barrier before pointing to the current historical high of $3,057.
On the downside, the S1’s daily support stands at $3,006, just above the $3,000 level, which might signal bullish momentum. This suggests that the market no longer faces exposure to the $3,000 level, and certain factors help slow down any downward movements. At the bottom, the S2 support comes in at $2,992.
