Gold prices remained near record highs during Friday’s London trading session as US President Donald Trump delayed his plans for reciprocal tariffs, leading financial markets to adopt a risk-on stance. The decline of the dollar following Trump’s decision provided support for gold, pushing it to approximately $2,900 per troy ounce.
Despite speculation that the U.S. could intervene to end the ongoing conflict between Russia and Ukraine, gold’s demand remained robust. Trump’s suggestion of potential peace talks between Russia and Ukraine failed to dampen the yellow metal’s rally, as traders remained focused on economic uncertainty and inflation concerns.
Gold prices continue their ascent, driven by persistent inflation fears and the Federal Reserve’s stance on interest rates. Gold was on track to rise by roughly 2.5% for the week, marking its seventh consecutive week of gains. Trump’s executive order to explore reciprocal tariffs on major U.S. goods heightened market uncertainty, further boosting demand for safe-haven assets like gold.
Federal Reserve Chairman Jerome Powell’s confirmation that interest rates are likely to remain unchanged for an extended period also played a role in gold’s rally. While higher U.S. Treasury yields typically weigh on gold, investors have turned to bullion as a hedge against ongoing inflation concerns.
Gold’s momentum is supported by the CME FedWatch tool, which signals an increased likelihood that rates will stay steady through June. This, combined with geopolitical tensions, particularly around NATO and Ukraine, has led to further weakness in the U.S. dollar, further enhancing gold’s appeal.
The upcoming April deadline for U.S. trading partners to face restrictions on significant U.S. goods has improved market sentiment, as it allows more time for negotiations with Washington. Trump’s earlier imposition of 25% tariffs on steel and aluminium imports continues to influence market dynamics.
Gold’s breakout from a consolidation phase that began in October, alongside Trump’s trade actions, signals an ongoing uptrend. Tariffs on the industrial sector, particularly steel and aluminium, have fueled concerns about potential disruptions to American businesses’ supply chains.
Despite the broader geopolitical uncertainty, strong central bank demand and expectations of a rate cut from the Federal Reserve are likely to support gold in the long term. Traders continue to anticipate further gains, with key targets now exceeding $3,000 per ounce.
