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“Markets are bracing for further disruptions as trade tensions escalate unpredictably. Gold and silver are natural beneficiaries in such a climate,” said a Hong Kong-based precious metals strategist.
Tariff Volatility Fuels Flight to Safety
The latest rally in gold is largely driven by abrupt shifts in U.S. trade policy. On Monday, President Trump delayed certain tariffs for 90 days, sparing electronics such as smartphones and computers. Just days later, he reversed course, reaffirming a 145% duty on select Chinese imports, while threatening additional tariffs on pharmaceuticals and semiconductors.
In response, China announced its own tariff hike, raising duties on U.S. goods to 125%. The rapid policy reversals and lack of clarity have sparked fears of a prolonged trade conflict, sending investors into assets less vulnerable to policy risk.
Rate Cut Bets and Dollar Weakness Underpin Bullion Demand
Markets are now pricing in 100 basis points of Fed rate cuts in 2025, dragging the U.S. Dollar Index to its lowest level since April 2022. A weaker dollar has improved the relative appeal of gold for non-dollar holders, adding further fuel to the rally.
Even stronger-than-expected Chinese growth figures—Q1 GDP rose 5.4% year-over-year—were overshadowed by global trade anxieties. Until the Federal Reserve clarifies its policy trajectory, gold and silver are likely to remain well bid amid safe-haven flows.
Short-Term Forecast
Gold and silver remain in firm uptrends, supported by safe-haven demand, a weak U.S. dollar, and bullish technical breakouts. Upside momentum targets $3,350 for gold and $34.60 for silver.
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