Gold prices rose in early Tuesday trading, extending the previous session’s gains and reaching a fresh all-time high above $4,700. Tensions between the US and Europe are escalating following Washington’s demands over Greenland and Europe’s robust pushback, which triggered the announcement of new US tariffs on imports from eight European countries and raised the prospect of retaliatory measures by Brussels. Against this backdrop, risk appetite has deteriorated, weighing on global equity markets, including in the US, with Nasdaq and S&P 500 futures trading lower. By contrast, safe-haven assets are in strong demand, supporting gold prices at record levels. At the same time, the US dollar is weakening, with the index tracking its performance against major currencies down by more than half a percent. This environment is supportive for gold, given the inverse relationship between the two assets. With uncertainty dominating investor sentiment and the greenback under pressure, there may be further scope for gains in gold prices.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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