NEW YORK: Gold prices rose back above $3,000 per ounce on Tuesday as a weaker US dollar and escalating trade tensions between the world’s two largest economies lifted demand for the safe-haven asset.
Spot gold was up 0.8% at $3,007.21 an ounce by 08:44 a.m. ET (1244 GMT), moving away from a more than three-week low touched on Monday in a pullback from last week’s record high of $3,167.57. US gold futures gained 1.6% to $3,021.90.
“Despite falling for three consecutive sessions, gold remains bullish with trade tensions and the prospect of lower US interest rates boosting its allure,” said Lukman Otunuga, senior research analyst at FXTM.
“A solid breakout above $3,055 may open the doors back toward $3,100 and $3,130. Sustained weakness below $3,000 could see gold slip toward $2,950 and $2,930.” Concerns over a global trade war since US President Donald Trump’s announcement of reciprocal tariffs on April 2 have raised fears of a recession and prompted investors to take refuge in the safe-haven assets like gold.
China has refused to bow to what it called “blackmail” from the US as a global trade war ignited by Trump’s sweeping tariffs showed little sign of abating.
Gold, often used as a safe store of value during times of political and financial uncertainty, has risen 15% so far this year. Further helping gold, the dollar index fell against its rivals, making bullion less expensive for other currency holders.
Investors are now looking forward to minutes from the US Federal Reserve’s latest policy meeting due on Wednesday for more clues on the path of rate cuts.
Traders are pricing in about 40% chance of a Fed cut in May. Zero-yield bullion tends to thrive in a low interest rate environment. “The significant rise in rate cut expectations in recent days suggest that the gold price will soon rise again,” Commerzbank said in a note. Elsewhere, spot silver gained 0.4% to $30.23 an ounce, platinum rose 1.3% to $925.33 and palladium eased 0.5% to $914.18.
Comments