gold prices are currently hovering around $2,800, achieving an unprecedented peak as of early Friday. This surge is fueled by renewed selling of the US Dollar and ongoing trade tariff threats from the Trump administration, which have heightened interest in safe-haven assets, notably gold , as investors await the release of the US core Personal Consumption Expenditures (PCE) Price Index.
Investor anxiety has intensified due to President Trump’s recent warnings regarding potential tariffs on BRICS nations, should they attempt to replace the US Dollar in global trade. These threats are prompting a rush for traditional hedges against economic uncertainty, including gold and the Japanese Yen, alongside US government bonds. Furthermore, Trump’s announcement of a forthcoming 25% import tax on goods from Canada and Mexico, citing issues related to fentanyl, adds to market jitters.
As demand for gold remains strong, the currency struggles, particularly with the USD/JPY pair. The Japanese Yen benefits from a risk-averse environment, especially in light of recent high inflation data from Tokyo that has increased speculation about interest rate hikes by the Bank of Japan.
Market participants are keenly focused on the upcoming US core PCE data, which is closely watched as the Federal Reserve’s preferred inflation indicator. This is particularly important following a larger-than-anticipated slowdown in GDP growth for the final quarter of 2024, which registered a 2.3% annualized increase, falling short of expectations. This disappointing data puts downward pressure on the US Dollar, even as tariff threats provide some late-session support, but the overarching sentiment remains one of caution, keeping gold firmly in demand.
Looking ahead, reports suggest possible tariffs could be unveiled over the weekend, reinforcing gold ’s appeal as a store of value and hedge against inflation. With gold already breaking the previous record highs, there is potential for further gains, especially if prices sustain above the $2,800 mark, aiming for $2,850 next. Immediate support is expected at $2,754, with further levels at $2,731 and $2,714 should the market pull back.
