Gold Prices Rise Amid Economic Uncertainty
Krasnoyarsk, Russia – Gold prices are experiencing an upward trend, having risen for the second consecutive session on Tuesday, February 18, 2024. However, prices remain below the historic high achieved last week, reflecting ongoing economic uncertainties tied to U.S. trade policy under President Donald Trump’s administration.
Current Market Performance
As of 1240 GMT, spot gold had gained 0.6%, trading at $2,914.98 an ounce, just shy of the record peak reached on February 11, when it soared to $2,942.70. Alongside this surge, U.S. gold futures also saw an increase, rising 1% to $2,928.80 amid the continuing volatility in global markets.
The Impact of U.S. Tariff Policies
Expert analysis attributes the rising demand for gold, a traditional safe haven asset, to concerns over President Trump’s tariff strategies. Nikos Tzabouras, a senior financial writer at trading platform Tradu, noted that Trump’s ‘disruptive modus operandi’ and aggressive tariff threats could lead to unraveling complex global trade relationships, prompting investors to seek safety in gold.
“Gold is set to remain a natural beneficiary of risk-off flows and central bank buying,” Tzabouras explained, underscoring how geopolitical tensions and economic uncertainty drive buyers towards bullion.
Central Bank Support and Future Trends
Analysts at Commerzbank echoed these sentiments, stating that central banks’ continued purchase of gold would provide crucial support for prices. This influx of central bank buying occurs despite the absence of new data on gold demand.
Currently, market attention is shifting towards the anticipated release of the U.S. Federal Reserve’s January meeting minutes, which are due on Wednesday. Traders are particularly interested in insights regarding potential interest rate adjustments, with rising expectations that a rate cut could materialize in 2025. Ricardo Evangelista, senior analyst at ActivTrades, suggested that declining retail sales figures have further fueled this sentiment, prompting gold’s price gains.
Broader Precious Metals Market
While gold is benefitting from this environment of geopolitical and economic uncertainty, other precious metals are reacting differently. Spot silver decreased by 1% to $32.46 an ounce, while platinum rose by 0.9% to $984.10. Palladium also saw gains, climbing 1.3% to reach $975.00.
In summary, gold’s value remains intricately tied to global trade dynamics, central bank purchasing behaviors, and broader economic indicators. As investors remain cautious in a fluctuating market, gold’s appeal as a safety asset continues to rise.
Reporting by Anjana Anil, Ishaan Arora, Rahul Paswan in Bengaluru; additional reporting by Swati Verma; Editing by Eileen Soreng.
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