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Fed Chair Jerome Powell has acknowledged that inflation is moderating, but persistent price pressures remain a concern. Traders are now closely monitoring upcoming U.S. economic data, including weekly jobless claims, the Philly Fed Manufacturing Index, and existing home sales, for further clues on the central bank’s policy direction.
Gold Gains on Economic and Trade Uncertainty
Aside from monetary policy, concerns over global trade policies are adding to gold’s strength. The Biden administration’s recent decision to maintain 25% tariffs on steel and aluminum imports has heightened fears of supply chain disruptions and slower economic growth. Uncertainty over trade relations, particularly with China, has also fueled safe-haven demand.
Analysts note that gold historically benefits from periods of economic and policy uncertainty. “With inflation concerns persisting and central banks facing difficult rate decisions, investors are turning to gold as a hedge against potential economic volatility,” said Chris Wong, FX strategist at OCBC Bank.
Geopolitical Tensions Drive Safe-Haven Demand
Geopolitical risks continue to underpin gold’s rally. Heightened tensions across multiple regions, particularly in Eastern Europe and the Middle East, have driven investors toward safe-haven assets. While diplomatic efforts are ongoing, uncertainty surrounding energy markets and potential supply chain disruptions remains a key concern.
Elsewhere, discussions between major central banks, including the Bank of England and the Swiss National Bank, are being closely watched for potential shifts in monetary policy. These decisions could impact global market sentiment, influencing gold prices in the near term.
Short-Term Forecast
Gold remains bullish above $3,042, with resistance at $3,058. A break higher could push prices toward $3,074, while a drop below $3,042 may trigger short-term profit-taking.
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