Gold held steady around $3,020 per ounce on Wednesday, hovering near record highs, as it maintained its appeal as a safe-haven asset amid growing uncertainty surrounding the impending rollout of US reciprocal tariffs.
Gold trades at record levels
While President Donald Trump's tariff plan, set to take effect on April 2, is expected to be more targeted and limited than his previous pledges, it still represents a significant escalation in trade tensions between the US and its major trading partners. The prospect of new duties on key imports has heightened concerns about global economic growth and the potential disruption to international trade, prompting investors to seek refuge in gold as a hedge against market volatility.
Meanwhile, market participants are closely monitoring speeches from several Federal Reserve officials for further clues on the central bank’s monetary policy for the remainder of the year. Investors are particularly eager for any signals about the Fed's stance on interest rates and inflation management. The release of the US Personal Consumption Expenditures (PCE) data on Friday will also be a key event, as this inflation gauge is the Fed’s preferred measure for assessing price pressures. The data could provide critical insights into the central bank’s next moves and influence market expectations for future rate hikes or cuts.
Geopolitical developments
On the geopolitical front, a series of agreements brokered by the US between Ukraine and Russia on Tuesday to pause attacks at sea and on energy infrastructure brought some relief to markets. Washington also pledged to push for sanctions relief for Moscow, easing some of the tensions in the region. While these diplomatic efforts slightly dampened gold’s safe-haven allure by reducing immediate concerns over geopolitical risks, the broader picture remains uncertain. Ongoing trade frictions, potential shifts in monetary policy, and evolving geopolitical dynamics continue to support gold's position as a go-to asset in times of global uncertainty. As a result, bullion remains a key beneficiary of investor caution, with many viewing it as a hedge against both economic and political risk.
