Gold rose in the global market on Tuesday, approaching a peak not seen in two weeks, supported by strong demand for safe-haven assets amid intensifying trade tensions and heightened anticipation of tomorrow’s Federal Reserve decision.
The spot price of gold reached $3,374.78 per ounce as of 2:19 PM Cairo time, marking a 1.2% increase, while U.S. gold futures climbed 1.9% to $3,383.90.
Why Is Gold Surging Now?
- Trump’s New Tariffs: U.S. President Donald Trump announced a 100% tariff on imported films and threatened to impose tariffs on pharmaceuticals within two weeks, sparking panic across the markets.
- Federal Reserve Meeting Tomorrow: While it’s widely expected that interest rates will be held steady, remarks by Jerome Powell may hint at a potential rate cut—any indication of monetary easing typically benefits gold.
- Falling Real Yields: Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold, boosting its appeal.
“The forces driving gold higher—trade tensions and concerns over the dollar’s status as a reserve currency—are still in play, and we may see a retest of the $3,500 level this year,” said Giovanni Staunovo, commodities analyst at UBS.
- Gold reached its all-time high of $3,500.05 in April, driven by central bank purchases and strong investment demand.
- Derivatives markets are pricing in a 75 basis point cut in U.S. interest rates this year, likely starting in July.
- Any actual rate cut would weaken the dollar and could trigger a new rally in the precious metal.
What Do These Moves Mean for Investors?
- Portfolio Diversification: Gold remains an effective shield against political and economic shocks. For many investors, allocating 5–10% of their assets to precious metals is considered a comfortable balance.
- Short-Term Outlook: Tomorrow’s Fed decision could trigger sharp volatility. It’s wise to manage speculative positions with clearly defined stop-loss orders.
- Medium-Term View: If the U.S. does go ahead with interest rate cuts later this year, we may see a serious attempt to break above the $3,500 mark—potentially paving the way for new all-time highs.
📌 Goldyza Summary:
Trade tensions and expectations of U.S. monetary easing have reignited gold’s shine ahead of the Fed meeting. Until Jerome Powell’s tone becomes clearer tomorrow, markets may remain volatile—but the underlying fundamentals favor a continued upward trend in the medium term.
