Gold Prices Rise Due to Trade Wars and Slowing Inflation
Gold prices are rising amid escalating trade wars and slowing inflation, which stimulates interest in safe assets.
According to Reuters, on Thursday, gold prices rose due to increasing demand for safe assets amid trade tensions. The spot price of gold increased by 0.33% to $2,943 per ounce, while April futures jumped by 0.23% to $2,953. Analysts predict that gold could reach $3,000 in the coming months.
Edward Mear, an analyst at Marex, noted that despite positive data on the Consumer Price Index (CPI), the impact of increased tariffs has not yet reflected in inflationary indicators. According to a report from the US, the Consumer Price Index rose less than expected last month, but this improvement is likely to be temporary, given the aggressive measures to increase import tariffs, which could raise the prices of goods in the coming months.
Lower inflation gives the Federal Reserve (Fed) more room to lower interest rates, which also supports gold prices, as gold has low yields in a low-interest-rate environment.
Earlier forecasts about the impact of trade tariffs on the economy led to a record high gold price of $2,956 on February 24. Investors are eagerly awaiting the publication of the Producer Price Index (PPI) data in the US, which will be released later and could have additional effects on the market.
Meanwhile, the spot price of silver decreased by 0.8% to $32.97 per ounce, platinum fell by 0.7%, to $977.05, and palladium dropped by 0.5% to $943.72 per ounce.
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