Gold prices rose in early Tuesday trading, approaching the $5,100 level and the all-time highs reached in the previous session. After Monday’s rollercoaster, when bullion surged to a record level before surrendering all its gains and closing almost exactly where it had started, the precious metal regained the upper hand. Underlying conditions remain supportive, with elevated geopolitical tensions, economic uncertainty and a weakening US dollar all providing tailwinds for gold. Negotiations between Russia and Ukraine appear to be stalling, while the risk of a large-scale US attack on Iran remains on the table. This backdrop of global geopolitical turbulence is reinforcing gold’s safe-haven appeal. At the same time, economic uncertainty is being amplified by renewed US tariff threats and the growing risk of a US government shutdown, after a sizeable group of lawmakers pledged to withhold support for funding measures linked to the ongoing immigration enforcement surge. Meanwhile, the US dollar remains under pressure amid dovish expectations for the Federal Reserve, further supporting gold given the inverse relationship between the two assets. Against this backdrop, the path of least resistance for gold prices continues to point higher, with tomorrow’s Federal Reserve rate decision and the Chair’s press conference likely to be the key focus for investors seeking clearer signals on the central bank’s policy outlook.
Ricardo Evangelista, ActivTrades
Source: ActivTrader
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