Gold reclaimed levels above $2,900 per ounce after a modest dip on Monday. That earlier pullback occurred amid a broader market sell-off triggered by President Trump’s warning about economic headwinds tied to his new tariff measures.
Although gold is widely viewed as a safe-haven asset in times of uncertainty, it can come under short-term pressure when investors sell holdings to raise cash during market turbulence. Still, the metal has gained about 11% so far in 2024, repeatedly reaching new highs.
Three primary forces are supporting gold’s advance: concerns over the potential economic impact of policy changes from the Trump administration, steady buying by central banks, and growing expectations that the Federal Reserve will ease interest rates further. Lower rates tend to favor non-yielding assets such as gold by reducing the opportunity cost of holding them.
Physical demand has eased in two major consumer markets, India and China, but that weakness has been offset to some degree by strong inflows into gold-backed exchange-traded funds, which are trading at their highest levels since December 2023. Overall, the market balance reflects a mix of cautious investor positioning, central bank purchasing, and macroeconomic expectations that all continue to support gold prices.