XAU/USD Gains 1.5%

Gold hits new all-time high today fueled by US recession fears and trade war tensions

Gold is reaching new all-time highs today, rising by over 1.5% (having gained more than 2% at its peak), as demand for the precious metal remains very strong, supported by solid fundamentals. Gold has just completed its best week since 2020 and has already risen by nearly 25% this year. Compared to the 2022 lows, it has almost doubled in value. Capital flowing out of risky assets is currently seeking ‘safe havens’, increasingly favoring gold amid weakening confidence in U.S. debt. Fears of an economic slowdown in the U.S. and tensions in global trade are further supporting gold.

• The unpredictable policies of Donald Trump have shaken global assets, while weakening demand for U.S. debt appears to be undermining the dollar’s status as the world’s reserve currency. Disappointing performance of U.S. Treasuries, which failed to serve as a traditional ‘safe haven’, is prompting investors to increase their exposure to gold.
• Additionally, the uncertain outlook for Federal Reserve rate cuts this year, despite a forecasted economic slowdown, is encouraging a preference for gold over bonds.
• The ongoing trade war is heightening geopolitical tensions, and its final outcomes remain unknown, although it is almost certain that economic growth will slow and inflation will rise. In such an environment, both long-term investors and capital managers, including hedge funds, are increasingly turning to gold as possibly the best remedy against the uncertainty fueled by Donald Trump’s policies.

Today’s U.S. data showed a surprising month-over-month decline in PPI inflation (along with a much weaker-than-expected annual rate) and a sharp drop in consumer sentiment. U.S. consumer confidence plunged in March to the lowest levels since 2022, with the expectations index now even lower than during the 2008 financial crisis and the COVID-19 pandemic. Over 67% of respondents expect unemployment to rise — the highest reading since 2009. Gold is benefiting from the persistent economic uncertainty.

GOLD (Daily Chart – D1)

Gold climbs to new all-time highs above $3,230 per ounce, supported by a weaker dollar and disappointing performance of U.S. Treasuries, which have ‘failed’ to act as a hedge against market volatility and the policies of Donald Trump.

Source: xStation5

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