Gold rose towards $2,750 per ounce on Wednesday, extending a gain of over 1% from the previous session to reach its highest point since early November.
Gold hits over 11-week high
The precious metal has been bolstered by a weaker US dollar and increased demand for safe-haven assets amid ongoing concerns over trade wars, following President Trump’s announcement of potential tariff measures. Trump proposed imposing tariffs on the European Union and reiterated his consideration of a 10% tariff on China, in addition to previous statements about potential hefty levies on Canada and Mexico.
Weighing inflation risks
Meanwhile, traders continued to weigh inflation risks, as Trump’s policies were widely viewed as inflationary, which could lead the Federal Reserve to maintain high interest rates for an extended period to curb price pressures. This scenario could reduce gold’s appeal, as higher rates raise the opportunity cost of holding non-yielding assets.
