Noor Trends News, Technical Analysis, Educational Tools and Recommendations
Gold prices remained steady at all-time highs in Asian trading on Friday, driven by escalating U.S.-EU trade tensions and weaker-than-expected U.S. inflation data, which bolstered expectations of potential Federal Reserve rate cuts.
Key Gold Price Movements:
- Spot Gold: $2,986.62/oz, after hitting a record high of $2,993.90/oz earlier.
- Gold Futures (April): $2,999.17/oz, up 0.2%.
- Weekly Gain: Gold is on track for a 2.5% rise this week.
Market Drivers:
1. Trump’s Tariff Threats Boost Safe-Haven Demand
- U.S. President Donald Trump proposed a 200% tariff on European alcoholic beverages, retaliating against the EU’s 50% levy on American whiskey.
- The dispute follows Trump’s 25% tariffs on steel and aluminum imports, escalating trade tensions.
- Investor sentiment shifted towards safe-haven assets like gold, amid fears of economic instability and recession risks.
2. Softer U.S. Inflation Reinforces Rate Cut Hopes
- Consumer Price Index (CPI) and Producer Price Index (PPI) showed weaker-than-expected inflationary pressures.
- This increases the likelihood of Federal Reserve rate cuts later in 2024, making non-yielding assets like gold more attractive.
- Fed Policy Outlook:
- The Federal Reserve meets on March 18-19.
- Consensus: Rates are likely to remain unchanged, but future cuts are anticipated if inflation continues cooling.
Other Market Reactions:
- U.S. Dollar Index (DXY): Up 0.1% in Asian trading, recovering from a four-month low.
- Platinum Futures: +0.4% to $1,014.65/oz.
- Silver Futures: +0.7% to $34.505/oz.
Outlook:
Gold’s safe-haven appeal is strengthening amid trade tensions and Fed rate cut expectations. If global economic uncertainties persist, gold could break past the $3,000/oz psychological level in the near term.
