Gold prices edged higher on Wednesday. Investors sought the comfort of the safe-haven metal in anticipation of the potential impact of new reciprocal tariffs. U.S. President Donald Trump is set to levy these tariffs on global trading partners.
Spot gold rose 0.1% to $3,113.24 an ounce as of 0710 GMT. Bullion hit an all-time high of $3,148.88 on Tuesday.
U.S. gold futures eased 0.1% to $3,141.80.
Aakash Doshi, global head of gold strategy at State Street Global Advisors, said, “The market could test $3,400/oz over the next 9 months in a bull case scenario.”
Suspense surrounded the market ahead of the U.S. tariffs. The tariffs are due to be announced at 2000 GMT on Wednesday. President Donald Trump has called this day “Liberation Day.”
The White House confirmed new tariffs will be imposed. It provided no details on the size or scope.
Trump’s tariff policies could flare up inflation, slow economic growth, and escalate trade disputes.
Philip Newman, managing director of Metals Focus, said, “The main reason for these successive record highs has been safe-haven buying, and the geopolitical uncertainty underpinning this shows no sign of letting up.”
Newman stated that a U.S. economic slowdown, potentially higher inflation, and interest rate cuts could set the stage for gold to reach $3,300 in the coming months.
Strong central bank demand and expectations of interest rate easing by the Federal Reserve have fueled gold’s rally. Geopolitical instability in the Middle East and Europe and increased flows into gold-backed exchange traded funds have also contributed.
The metal is considered a hedge against political instability and inflation.
Fed officials are concerned that employment could slip. However, the threat of tariff-driven inflation limits their ability to do anything about it.
After a topsy-turvy Tuesday on Wall Street, the Dow ended flat. The S&P 500 added nearly four-tenths of a percent, and the Nasdaq gained almost nine-tenths of a percent.
Markets also await the U.S. ADP employment report due later in the day and non-farm payrolls due on Friday.
Spot silver lost 0.3% to $33.63 an ounce. Platinum slipped 0.5% to $974.90, and palladium fell 0.3% to $980.67.
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