Gold News

Gold prices remain relatively stable on Wednesday. Investors' buying on the drawdown is holding back the fall in prices, but easing trade tensions between the US and the EU are preventing the market from further increase.

Gold prices declined slightly amid falling demand for safe-haven assets. Bloomberg experts attribute this drop to the prospect of improving trade relations between the United States and the European Union.

The Atlantic Council warns that aggressive US tariff policies are driving global economies to buy ever more gold. A growing number of governments are turning to gold to mitigate exposure to US restrictions by treating the precious metal as a de facto global currency.

Donald Trump's plans to impose 50% duties on European goods remain a serious threat to the global economy. Besides, surging US debt undermines investor confidence in the Treasury bond market. Weak demand for bonds and, as a result, a sharp rise in yields may boost interest in gold.

Citi has raised its short-term outlook for gold to $3,500 citing trade and geopolitical uncertainty. Analysts expect the metal prices to consolidate between $3,100 and $3,500. The forecast released on May 12 suggested the range of $3,000–3,300.

Despite reports suggesting easing trade tensions between the US and China, gold has maintained its position above $3,340 an ounce, as noted by analysts from Kitco News.

Gold prices fell to $3,350 per ounce after climbing by almost 5% last week. This decline came after US President Donald Trump postponed the imposition of tariffs on EU imports until July 9, giving both parties more time to negotiate a trade deal, Bloomberg reports.

The weekly rise in gold prices may be the strongest in the past 1–1.5 months, Reuters reports. The rebound is driven by concerns over US fiscal policies. Market participants are worried that the problem of government debt, which is already urgent, will worsen.

Amid some relaxation of global trade tensions, the gold market is experiencing a relatively mild correction. The price of the main precious metal has fallen from last month's highs, but is still above the support level of $3,300 per ounce.

As of Thursday, May 22nd, gold prices have reached a 2-week high. Investing experts attribute the increase to the worsening US government debt issue and escalating geopolitical tensions in the Middle East.