Are tariff concerns driving demand for safe havens?
President Trump's comments on tariffs, including proposed taxes on imports from Mexico, Canada and China, raised concerns about disruption to global trade. This uncertainty has led investors to turn to gold as a hedge against economic uncertainty. Hopes for a “friendlier” resolution on trade talks with China have brought some relief, but skepticism remains high.
Will inflation and bond yields continue to support gold?
Inflation concerns were also evident, with analysts pointing to the potential impact of tariffs on consumer prices. US Treasury yields fell, further supporting gold prices as markets absorbed Trump's comments and awaited key economic data. BlackRock CEO Larry Fink warned that rising inflation could harm stock markets and indirectly benefit gold.
What role will the Fed meeting play in gold's next move?
Looking ahead, all eyes are on next week's Federal Reserve meeting, with no interest rate changes expected. However, the Fed's post-meeting statement and Chairman Powell's comments will be crucial to market sentiment. Key economic data such as fourth-quarter GDP and Personal Consumption Expenditures (PCE) index are also expected, which could increase volatility in the gold market.
