"Renewed demand for safe-haven assets amid rising trade and geopolitical uncertainty could continue to support the market. A new 10% global tariff introduced by the US administration came into effect this week, with indications that the rate could be lifted further. This could reignite trade frictions and unsettle global supply chains, which could drive investors to hedge with precious metals."
"At the same time, markets are closely monitoring the resumption of the discussions between Washington and Tehran. While Iranian officials have signalled willingness to advance negotiations, the path toward a definitive agreement remains full of obstacles. A breakdown in negotiations could precipitate flows into safe-haven assets like gold."
"Inflows into gold ETFs were modest last week, suggesting some hesitation after robust US GDP data, firmer PCE readings, while the Federal Reserve's minutes showed a divided committee and reduced expectations of aggressive easing. Recent remarks from Fed officials advocating patience reinforce a data-dependent stance, which could weigh on gold to a certain extent."
Gold advanced on Wednesday, recovering from the previous session's decline as safe-haven demand strengthened amid multiple global uncertainties. A new 10% US global tariff came into effect with potential for further increases, threatening to reignite trade frictions and disrupt supply chains, prompting investors to seek precious metals as hedges. Ongoing US-Iran negotiations remain uncertain despite Iranian willingness to advance talks. Eastern European hostilities and Mexican instability add to global fragility. However, robust US GDP data, firmer PCE readings, and Federal Reserve minutes indicating a divided committee with reduced easing expectations tempered gold's gains. Modest ETF inflows suggest investor hesitation, while Fed officials' emphasis on a data-dependent approach could continue to weigh on prices.
Read at London Business News | Londonlovesbusiness.com
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