Gold prices climbed lifted during Wednesday’s Asian session as global trade tensions and rising recession fears reignited demand for safe-haven assets.
By 3:50 pm AEST (5:50 am GMT) spot gold prices added $35.78 or 1.2% to US$3,018.08 per ounce.
Analysts from ANZ noted: "Haven buying returned amid fears that an increasingly hostile trade war will cause an economic downturn. The precious metal pushed back above USD3,000/oz after shedding almost 5% during the past three sessions."
Investors continue to seek the safety of gold as concerns mount over the economic fallout from escalating trade disputes, particularly after the United States imposed sweeping new tariffs on numerous trading partners.
Supporting the gold rally further is broad-based weakness in the United States dollar, which extended its decline for a second consecutive session. Markets are increasingly confident that the Federal Reserve will begin cutting interest rates soon, adding further support to the non-yielding bullion.
According to the CME Group's FedWatch Tool, traders are pricing in a 58.8% probability of a rate cut in May. Expectations currently point to as many as five Fed rate cuts throughout 2025.
Looking ahead, investors are focused on the release of the minutes from the Fed’s latest policy meeting. Additional attention will be paid to key inflation readings - the consumer price index (CPI) and the producer price index (PPI) - which could shape expectations for the Fed’s rate path and influence the trajectory of gold prices in the near term.
