Gold prices surged to fresh all-time highs during Asian trading hours on Wednesday, driven by heightened geopolitical tensions and renewed fears over escalating trade tariffs. As investors brace for the highly anticipated Federal Reserve policy meeting later in the day, risk aversion continues to dominate financial markets, further fueling demand for the precious metal.
Gold Extends Rally as Middle East Tensions and Tariff Concerns Escalate
Spot gold edged up by 0.1% to a historic $3,039.0 per ounce, while gold futures expiring in May climbed 0.1% to $3,046.12 per ounce, marking a significant milestone for the commodity. The ongoing rally follows a week of sharp gains, as markets reacted to growing geopolitical risks and economic headwinds.
Investors are turning to gold as a safe haven amid a deteriorating global outlook, driven in large part by renewed Middle East instability and trade protectionism. The collapse of the Israel-Hamas ceasefire has reignited fears of a broader regional conflict, while the Russia-Ukraine situation remains unresolved. These geopolitical flashpoints continue to bolster gold’s appeal as a secure store of value.
Trump’s Trade Policy Fuels Fears of Economic Slowdown
The latest surge in gold prices is also linked to growing concerns over President Donald Trump’s trade agenda. Trump’s aggressive stance on tariffs, especially his unpredictable policy shifts regarding Canada and Mexico, has amplified investor uncertainty. The U.S. President has threatened to raise tariffs further in early April, stoking fears of a deeper global trade war that could dampen economic growth and intensify inflationary pressures.
The dollar weakened against major currencies as recession fears mounted, further supporting gold’s rally. A softer greenback traditionally boosts gold prices by making the metal cheaper for holders of other currencies.
Federal Reserve Meeting in Focus: Will Rates Stay Put?
All eyes are now on the Federal Reserve’s policy meeting, with markets widely expecting the central bank to leave interest rates unchanged at 4.5%. Persistent concerns over the U.S. economic outlook under Trump’s administration are prompting the Fed to proceed cautiously.
The Fed is also scheduled to release its Summary of Economic Projections (SEP), providing deeper insights into its economic forecasts and future rate path. Any dovish signals or acknowledgments of rising economic risks could further fuel safe-haven demand and support gold’s bullish momentum.
Fed officials have consistently flagged uncertainty regarding near-term growth, limiting the scope for additional rate cuts. However, with inflation pressures lingering and geopolitical risks escalating, the Fed’s tone could play a critical role in shaping market sentiment.
Precious Metals Mixed as Gold Outperforms
While gold remained buoyant, other precious metals saw mild corrections following their recent rallies. Platinum futures slipped 0.4% to $1,016.90 per ounce, and silver futures dipped 0.5% to $34.55 per ounce, as traders booked profits ahead of key economic updates.
Despite this pullback, analysts expect both platinum and silver to benefit from broader safe-haven demand trends, especially if global macroeconomic risks persist in the coming months.
Copper Markets Steady as China Stimulus Optimism Builds
Among industrial metals, copper prices stabilized after recent strong gains. Optimism surrounding China’s latest stimulus measures helped keep sentiment upbeat. The Chinese government has unveiled fresh fiscal initiatives aimed at boosting domestic consumption and private sector investment, in a bid to counteract slowing economic growth.
On the London Metal Exchange, benchmark copper futures dipped slightly by 0.1% to $9,901.85 per ton, while May copper futures rose 0.3% to $5.0213 per pound in U.S. trade.
China’s Growth Rebound Could Support Industrial Metals
With China accounting for more than 50% of global copper demand, any signs of economic stabilization or growth acceleration in the country are expected to underpin copper prices. Analysts believe that Beijing’s new policy actions could help revive industrial activity and infrastructure investment, boosting the need for base metals like copper.
However, U.S. trade tensions could complicate this narrative. President Trump’s proposed tariffs on copper imports could tighten U.S. copper supply chains, raising costs for American manufacturers and potentially exacerbating supply-demand imbalances in the coming quarters.
Outlook: Gold’s Bullish Trend Set to Continue?
As geopolitical turmoil intensifies and global markets remain volatile, gold’s status as a safe-haven asset looks more secure than ever. With the Federal Reserve’s decision pending and escalating trade tensions dominating headlines, analysts predict that the yellow metal could continue its upward trajectory in the near term.
“Safe-haven demand is firmly entrenched as the geopolitical and macroeconomic backdrop grows increasingly fragile,” said a senior market strategist at a major investment firm. “If the Fed signals concern over the outlook, we could see gold push even higher.
