Gold prices rose as investors consider geopolitical tensions in the Middle East and the impact of US tariff measures on global trade.
Gold is approaching the $5,200/ounce mark, after increasing by nearly 6% in the last six sessions, amid US increased deployment of military forces in the Middle East, putting global markets in a state of instability. Washington has imposed sanctions on more than 30 entities believed to support Iran's oil and arms sales, thereby increasing pressure on Tehran ahead of a new round of nuclear talks scheduled for Thursday in Geneva.
At the same time, the administration of US President Donald Trump continues to promote moves to maintain the tariff program, increasing tensions in relations with already sensitive trading partners.
US Trade Representative Jamieson Greer said that Mr. Trump will sign an order to raise the global tax rate to 15% in "appropriate" cases. Previously, the universal tax rate of 10% officially took effect from Tuesday, after the US Supreme Court rejected the reciprocal tax mechanism pursued by Mr. Trump.
According to Christopher Wong, strategist at Oversea-Chinese Banking Corp. , new developments in gold prices reflect that the market is revaluing risks related to tariffs and geopolitical factors. He believes that gold prices are likely to fluctuate in a two-way accumulation direction, as the market continues to absorb new information, while monitoring the policy of the US Federal Reserve and fluctuations in the USD. The greenback strength index fell 0.1% on Thursday, after losing 0.2% in the previous session.
Since the beginning of the year, gold prices have increased by nearly 20%, standing firm again above the 5,000 USD/ounce mark after a two-day strong correction from a record high of 5,595 USD/ounce at the end of January. Prolonged geopolitical and trade tensions are adding momentum to the multi-year upward trend of gold, strengthening the trend of investors leaving the USD and US Treasury bonds to look for tangible assets.
In addition, concerns about government interference in the policy of the US Federal Reserve are also supporting gold prices. In a farewell post before retirement, Atlanta Fed Chairman Raphael Bostic said he was concerned that the American people are starting to question the independence of the central bank.
In the Asian market in this morning's trading session, spot gold prices rose 0.5% to 5,193.29 USD/ounce at 9:19 am. Silver prices rose 0.9% to 89.99 USD/ounce, while platinum and palladium also simultaneously went up.
