Spot Gold rebounded from a 3 1/2-week low of $2,956.56 per troy ounce on Tuesday, while reclaiming the $3,000 mark, as concerns over an escalating global trade war continued to underpin safe haven assets.
Yesterday US President Trump ramped up tariff threats against China, while the European Union outlined plans for retaliatory levies.
“Escalation of the trade war could trigger a global recession, and that is driving safe-haven demand,” Reliance Securities’ senior analyst Jigar Trivedi was quoted as saying by Reuters.
“Despite slipping in the previous sessions, gold is still strong and should remain on the upward trend,” the analyst added.
Media reports emerged on Monday stating that multiple countries were engaging with the US to negotiate “great deals” and that the White House was considering a potential 90-day pause on tariffs. Still, for now, it seems the pause will not apply to the levies imposed on Chinese imports.
Market focus now sets on the minutes of the Federal Reserve’s March meeting, due out on Wednesday, for clues over how policy makers have weighed the risk of a broader tariff war.
Markets are now pricing in about 93 basis points of interest rate cuts by the Federal Reserve by December.
Spot Gold was last up 1.02% on the day to trade at $3,012.40 per troy ounce.
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