REUTERS/MOHAMED ABD EL GHANY/FILE PHOTO
A gold vendor sorts jewelry pieces inside a shop at the gold market area in Cairo, Egypt, in December 2022. Gold rose to hit a record high today, as Middle East tensions and trade uncertainties lifted the bullion’s appeal, while traders awaited the Federal Reserve’s decision on Wednesday.
Gold rose to hit a record high today, as Middle East tensions and trade uncertainties lifted the bullion’s appeal, while traders awaited the Federal Reserve’s decision on Wednesday.
Spot gold held its ground at $3,035.12 an ounce, as of 0415 GMT, after hitting an all-time peak of $3,038.90 earlier in the session.
U.S. gold futures firmed 0.1% to $3,042.20.
“Traders are viewing gold as an asset which is well equipped to handle tariff-related economic uncertainty,” KCM Trade chief market analyst Tim Waterer said, adding that the current trading environment, where there is instability, is playing to gold’s strengths as an uncertainty hedge.
Investors are worried about an economic slowdown and elevated risks of recession due to U.S. President Donald Trump’s tariffs, which are widely considered likely to stoke inflation.
The tariffs have flared up trade tensions and include a flat 25% levy on steel and aluminum, which came into effect in February, and reciprocal and sectoral tariffs to be imposed on April 2.
Don’t miss out on what’s happening!
Stay in touch with breaking news, as it happens, conveniently in your email inbox. It’s FREE!
The Fed, which will conclude its two-day policy meeting later in the day, is expected to hold its benchmark interest rate steady in the 4.25%-4.50% range.
Non-yielding gold, a hedge against geopolitical and economic uncertainties, thrives in a low interest rate environment.
“If the FOMC meeting takes on a dovish tone in response to growing uncertainty over how tariffs may impact growth, this could provide a further assist to the gold price… could be a green light for gold to make a push above $3,050,” Waterer said.
Markets also await Fed chair Powell’s speech at 1830 GMT to pick up further clues on policy outlook.
Elsewhere, Israeli airstrikes pounded Gaza and killed more than 400 people on Tuesday, Palestinian health authorities said, shattering nearly two months of relative calm since a ceasefire began, as Israel warned the onslaught was “just the beginning.”
Spot silver fell 0.2% to $33.97 an ounce, platinum lost 0.4% to $992.85 and palladium eased 0.1% to $966.24.