Gold steadied above $2,910 per ounce on Wednesday, maintaining a 1% gain from the previous session, supported by its safe-haven appeal and a weaker U.S. dollar.
Gold holds advances on Wednesday
The precious metal’s resilience was bolstered by continued market uncertainty, as investors sought refuge from the escalating geopolitical and trade tensions. On Tuesday, U.S. President Donald Trump walked back his trade-war threat against Ontario, which had created volatility earlier in the day. Trump had initially vowed to double tariffs on Canadian steel and aluminum to 50%, triggering concerns of an escalating trade conflict. However, hours later, he reversed his stance, helping to reduce some of the market’s anxieties. Meanwhile, Ontario Premier Doug Ford temporarily suspended a planned 25% surcharge on U.S. electricity exports, providing some relief to energy markets.
Trade war remains a key driver
Despite these developments, global trade uncertainties remained a key driver of market sentiment, as worries over a potential U.S. tariff-induced recession lingered. Investors continued to flock to safe-haven assets like gold, viewing them as a hedge against broader economic instability. In addition to trade concerns, gold also gained support from persistent worries about inflationary pressures and the U.S. Federal Reserve’s potential policy moves.
However, geopolitical risk premiums saw some easing after the U.S. agreed to resume military aid and intelligence sharing with Ukraine, following Kyiv’s acceptance of a U.S.-proposed 30-day ceasefire with Russia. This temporary de-escalation in the conflict helped to calm some of the heightened risk sentiment in global markets, but uncertainty about the long-term stability of the ceasefire remains.
