Key Points
- Gold prices increased as investors sought safety amid new trade war fears.
- President Trump’s tariff announcements for Indonesia and potential new taxes on other goods fueled the concerns.
- The rise happened despite a recent dip caused by speculation that the U.S. Federal Reserve might not cut interest rates.
- Gold has been a strong performer this year. Analysts are also optimistic about silver, with Citigroup predicting its price will surpass $40 an ounce.
Gold prices edged higher as a new wave of tariff announcements from President Donald Trump revived concerns about a global trade war, prompting investors to seek the safe-haven metal.
Bullion traded near $2,335 an ounce after President Trump confirmed a 19% tariff on goods from Indonesia. He also mentioned that new taxes on pharmaceuticals could be introduced this month, with similar measures on semiconductors possibly to follow. At the same time, Washington launched a trade investigation into Brazil, adding to the uncertainty.
The move comes after gold fell slightly on Tuesday. A tame U.S. inflation report had led some to believe the Federal Reserve would keep interest rates on hold for now. Higher interest rates typically make other investments more attractive than gold, which doesn’t pay interest.
Overall, gold has been trading in a tight range recently but remains up more than 25% for the year. Its price has been supported by ongoing anxieties over trade tensions, geopolitical conflicts, and strong buying from both central banks and exchange-traded funds (ETFs).
Other precious metals also saw gains. Silver, which had recently pulled back from a nearly 14-year high, rose in tandem with platinum and palladium. Analysts at Citigroup are particularly bullish on silver, forecasting that it will rally past $40 an ounce in the coming months due to tight physical supplies and growing investor demand.
