Demand for gold remains high this week, and has pushed the metal to new all-time highs in major currencies on Tuesday. In USD gold passed $2,900 for the first time, a new major milestone that puts $3,000 well within reach.
Gold in GBP and Euros also hit new records of £2,382.24 and €2,857.81 per ounce respectively.
Gold passed $2,900 per ounce for the first time on Tuesday.
President Trump shocked markets over the weekend with an announcement of 25% tariffs to be applied to all imports of steel and aluminium, regardless of the origin and to be applied without exemption. With Canada and the EU promising retaliatory action, the trade war looks to be heating up just a few weeks after it began.
A higher-than-expected US inflation report on Wednesday compounded earlier statements by Jerome Powell that the Federal Reserve is in no rush to cut US interest rates. This has strengthened the dollar somewhat, but demand for gold so far seems to be outweighing what would normally be a bearish higher inflation report, and gold remains above $2,900 per ounce at the time of writing.
China’s banks, which supply gold directly to consumers, are showing supplies drying up, with many investment gold bars out of stock or in low numbers. Reports that China is also allowing some insurance companies to hold 1% of their reserves in gold, on top of their central bank’s return to gold reserve purchases in recent months, is only helping to drive consumers in China towards the safe haven asset in high numbers.
Although news of possible peace talks between Ukraine and Russia have brought some hope of an end to the war in Europe, events in the Middle East appear to be heading in the opposite direction. The ceasefire could end this weekend after a collapse in hostage exchanges, while Trump’s claims of the US taking over Gaza have also confused matters further.
The climb in the gold price Tuesday was exceptional, and inevitably brought some selling pressure, but with gold still above $2,900 per ounce it remains well-placed to take $3,000 per ounce in the weeks and months ahead. The dips present buying opportunities, albeit opportunities that require quick timing given how brief they have been of late.
