Today’s markets analysis on behalf of Joseph Dahrieh, Managing Principal at Tickmill
Gold prices stabilized after breaking another record high on the back of mounting trade tensions and growing concerns about a potential economic recession. After several back-and-forths on tariffs this week, market uncertainty surged following President Trump’s announcement of a 200% tariff on alcoholic imports from the EU, fueling risk aversion and boosting demand for safe-haven assets like gold.
Additionally, concerns over the stability of the US economy could further boost the appeal of gold. A cooling labor market and slowing inflation could push the Federal Reserve toward a more dovish stance at its next meeting, potentially driving gold prices to new records. However, a cautious tone, driven by inflation concerns over ongoing trade tensions, could limit the precious metal rally.
Geopolitical developments also play a crucial role in shaping market sentiment. A ceasefire between Ukraine and Russia could improve investor sentiment, potentially weakening gold’s bullish trend. However, the agreement remains to be seen, with Russian President Vladimir Putin leaving room for renewed uncertainty that may bolster gold prices once again.
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