During the Asian trading session on Tuesday, Spot gold once again broke through the key $3000 mark, reaching a high of $3028, a new all-time high. As a traditional safe-haven asset, since Trump took office in January, global trade tensions have intensified, driving strong safe-haven buying, leading to gold hitting a new high 14 times. Following a cumulative rise of 27% in 2024, it has risen by over 15.19% so far this year.
The threat of tariff policies is one of the driving factors behind the surge in gold prices this round. The uncertain trade policies in the United States have made gold a favored asset for investors in geopolitical and economic turmoil.
Since the beginning of this year, the United States has successively imposed tariffs on major trading partners such as China, Mexico, and Canada, and imposed a 25% tariff on all steel and aluminum imported into the United States. The US government's "tariff stick" has sparked intense global trade policy backlash. On the 12th, the European Commission stated that "tough counterattacks" have become the only "remedy," and will impose tariffs on US goods worth 26 billion euros starting next month. Canada, on the other hand, retaliated more rapidly, stating that retaliatory tariffs will be imposed on US goods worth 29.8 billion Canadian dollars starting from March 13th.
There are no winners in a trade war. The global economy is the first to bear the brunt, with increased vulnerability and dimmer economic prospects. Global stock markets plummet, prompting market participants to seek safe-haven assets, making gold the preferred destination for capital inflows.
Meanwhile, Trump regards tariff threats as bargaining chips, and his erratic policy actions and remarks continue to erode global market confidence. The market is not afraid of bad news, but dislikes uncertainty. Since the beginning of this year, the rising trend of gold prices coincides closely with the escalating trade conflicts, highlighting the direct driving force of tariff policy uncertainty on gold prices.
The hidden worries of the U.S. recession intensify, shaking market confidence
The weakening momentum of the US economic growth also gives gold the upward momentum. Data released by the US Department of Commerce on Monday showed that retail sales in February were far below expectations, adding to signals that consumers are reducing their spending, deepening concerns about a slowdown in consumer spending. Previous data showed that the US consumer confidence index has also declined for three consecutive months. As for the crucial service industry for the US economy, the initial value of the February service industry PMI announced last week was 49.7, not only far below market expectations, but also fell below the boom-bust line for the first time since January 2023, indicating a gloomier economic outlook.
At the same time, the trade war has further raised inflation expectations by pushing up import prices, while the U.S. government's downsizing plan has led to the dismissal of tens of thousands of federal employees, exacerbating market concerns about the outlook for economic growth. Investors have a 'high and risky' risk awareness of the U.S. stock market, and funds that have nowhere to go are flocking to gold.
Support from safe-haven demand and rate cuts could help gold prices continue to rise
The US economy is facing a "triple blow" of tariffs, government layoffs, and consumer contraction, shaking the confidence of businesses, consumers, and workers, and increasing the risk of recession. The market generally expects the Fed to implement multiple rate cuts in 2025 to stimulate economic growth. According to the latest FedWatch forecast, the timing of the next rate cut has been brought forward to June. Expectations of loose liquidity and a declining US dollar index will support the strength of gold prices.
In addition, since the Russia-Ukraine conflict, the West has frozen the assets of the Russian Central Bank, and central banks around the world have begun to show interest in moving away from the US dollar reserves and shifting their focus to gold. The demand for gold purchases from central banks has continued to grow, breaking the 1,000-ton mark for three consecutive years.
Various signs indicate that the gold market is entering a new cycle dominated by risk premiums, with many market institutions generally expecting strong buying pressure to continue to pump gold prices in the medium to long term.
As the global partner of the Argentina national team, 4E provides investors with convenient and flexible gold trading options. Through 4E, investors can enjoy up to 500 times leverage for long and short dual operations, and can trade with USDT, with a minimum opening position of less than 6 U. At the same time, 4E also supports a wide range of assets such as cryptocurrencies, foreign exchange, US stocks, indices, and commodities such as oil and silver, with over 600 trading pairs, providing investors with broad opportunities.
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Risk aversion and expectations of interest rate cuts resonate, gold rises more than 15.1% to hit a new high within the year.
During the Asian trading session on Tuesday, Spot gold once again broke through the key $3000 mark, reaching a high of $3028, a new all-time high. As a traditional safe-haven asset, since Trump took office in January, global trade tensions have intensified, driving strong safe-haven buying, leading to gold hitting a new high 14 times. Following a cumulative rise of 27% in 2024, it has risen by over 15.19% so far this year.
Escalating trade concerns intensify safe-haven demand
The threat of tariff policies is one of the driving factors behind the surge in gold prices this round. The uncertain trade policies in the United States have made gold a favored asset for investors in geopolitical and economic turmoil.
Since the beginning of this year, the United States has successively imposed tariffs on major trading partners such as China, Mexico, and Canada, and imposed a 25% tariff on all steel and aluminum imported into the United States. The US government's "tariff stick" has sparked intense global trade policy backlash. On the 12th, the European Commission stated that "tough counterattacks" have become the only "remedy," and will impose tariffs on US goods worth 26 billion euros starting next month. Canada, on the other hand, retaliated more rapidly, stating that retaliatory tariffs will be imposed on US goods worth 29.8 billion Canadian dollars starting from March 13th.
There are no winners in a trade war. The global economy is the first to bear the brunt, with increased vulnerability and dimmer economic prospects. Global stock markets plummet, prompting market participants to seek safe-haven assets, making gold the preferred destination for capital inflows.
Meanwhile, Trump regards tariff threats as bargaining chips, and his erratic policy actions and remarks continue to erode global market confidence. The market is not afraid of bad news, but dislikes uncertainty. Since the beginning of this year, the rising trend of gold prices coincides closely with the escalating trade conflicts, highlighting the direct driving force of tariff policy uncertainty on gold prices.
The hidden worries of the U.S. recession intensify, shaking market confidence
The weakening momentum of the US economic growth also gives gold the upward momentum. Data released by the US Department of Commerce on Monday showed that retail sales in February were far below expectations, adding to signals that consumers are reducing their spending, deepening concerns about a slowdown in consumer spending. Previous data showed that the US consumer confidence index has also declined for three consecutive months. As for the crucial service industry for the US economy, the initial value of the February service industry PMI announced last week was 49.7, not only far below market expectations, but also fell below the boom-bust line for the first time since January 2023, indicating a gloomier economic outlook.
At the same time, the trade war has further raised inflation expectations by pushing up import prices, while the U.S. government's downsizing plan has led to the dismissal of tens of thousands of federal employees, exacerbating market concerns about the outlook for economic growth. Investors have a 'high and risky' risk awareness of the U.S. stock market, and funds that have nowhere to go are flocking to gold.
Support from safe-haven demand and rate cuts could help gold prices continue to rise
The US economy is facing a "triple blow" of tariffs, government layoffs, and consumer contraction, shaking the confidence of businesses, consumers, and workers, and increasing the risk of recession. The market generally expects the Fed to implement multiple rate cuts in 2025 to stimulate economic growth. According to the latest FedWatch forecast, the timing of the next rate cut has been brought forward to June. Expectations of loose liquidity and a declining US dollar index will support the strength of gold prices.
In addition, since the Russia-Ukraine conflict, the West has frozen the assets of the Russian Central Bank, and central banks around the world have begun to show interest in moving away from the US dollar reserves and shifting their focus to gold. The demand for gold purchases from central banks has continued to grow, breaking the 1,000-ton mark for three consecutive years.
Various signs indicate that the gold market is entering a new cycle dominated by risk premiums, with many market institutions generally expecting strong buying pressure to continue to pump gold prices in the medium to long term.
As the global partner of the Argentina national team, 4E provides investors with convenient and flexible gold trading options. Through 4E, investors can enjoy up to 500 times leverage for long and short dual operations, and can trade with USDT, with a minimum opening position of less than 6 U. At the same time, 4E also supports a wide range of assets such as cryptocurrencies, foreign exchange, US stocks, indices, and commodities such as oil and silver, with over 600 trading pairs, providing investors with broad opportunities.