Gold prices surged to a two-week high on Tuesday, fueled by rising demand for safe-haven assets amid concerns over U.S. President Donald Trump’s tariff plans and investors awaiting the Federal Reserve’s policy meeting later this week.
As of 06:32 GMT, spot gold rose 0.9% to $3,362.69 per ounce, reaching its highest level since April 22. U.S. gold futures also increased by 1.5%, trading at $3,370.40 per ounce.
IG Markets strategist Yeap Jun Rong noted, “Gold prices are off to a strong start this week as investors return to safe-haven assets amid renewed concerns about Trump’s tariff policies and the potential volatility in investment portfolios.”
On Sunday, Trump announced a 100% tariff on foreign-made films, although he did not provide specific details on how the tariff would be implemented. On Monday, he also revealed plans to announce tariffs on pharmaceuticals in the coming two weeks.
Investors are closely monitoring the Federal Reserve’s interest rate decision and remarks from Chairman Jerome Powell, scheduled for Wednesday, to gauge clues on the future direction of monetary policy. The Fed has maintained its policy rate in the 4.25%-4.50% range since December last year.
Yeap further added, “Any dovish signals from the Fed could provide additional support for gold, reinforcing its broader upward momentum.”
Gold has traditionally been seen as a hedge against political and financial turmoil, thriving in low-interest-rate environments. According to Goldman Sachs, the Fed is unlikely to cut rates until it sees clear evidence from labor market data and other economic indicators. The investment bank expects three rate cuts in July, September, and October, each by 25 basis points.
In addition to gold, silver rose 1.5% to $32.98 per ounce, platinum climbed 1.4% to $972.25 per ounce, and palladium increased by 0.5% to $945.25 per ounce.
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