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Trump Tariffs Spark Policy Concerns, Lift Gold
Markets remain on edge following comments from former President Trump, who signaled that automobile tariffs are imminent and that not all trade measures will be enforced immediately.
While details remain unclear, the unpredictability of trade policy has already dampened business confidence. According to CNBC’s CFO Council survey, 60% of corporate CFOs expect a U.S. recession by year-end, a sharp rise from just 7% last quarter. Trade tensions top the list of external risks, followed closely by inflation and weakening demand.
This policy instability has triggered a pullback in equity appetite, with 90% of CFOs forecasting the Dow will retest the 40,000 level. Capital expenditure plans have also been curtailed, further supporting the appeal of gold as a defensive asset.
Fed Outlook Supports Bullion Amid Inflation Concerns
Gold has gained over 15% year-to-date and recently hit an all-time high of $3,057.21 per ounce on March 20. Although the Federal Reserve left interest rates unchanged last week, dovish guidance points to possible cuts later this year. Fed Governor Adriana Kugler noted inflation progress has stalled, reinforcing expectations for prolonged rate accommodation.
Markets are now awaiting the U.S. Personal Consumption Expenditures (PCE) data on Friday. A soft reading could accelerate rate cut bets, potentially extending gold’s rally. With bullion thriving in low-rate environments, any dovish surprise in the data will likely drive further buying.
Gold Technicals Watch: Key Pivots in Play
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