Gold prices have risen, buoyed by uncertainty surrounding US import tariffs and escalating geopolitical tensions in the Middle East. Bullion climbed 1 per cent, recovering from a 1.6 per cent decline in the previous session. The weaker US dollar and concerns over the potential impact of new American trade policies have also contributed to gold’s resurgence, particularly with nuclear talks involving Iran on the horizon this week.
Gold has stabilised above $US5000 an ounce, recovering over half the losses suffered during a significant downturn earlier in the month. According to Yuxuan Tang, head of macro strategy for Asia at JPMorgan Private Bank, a potential breakout to the upside appears to be forming. Tang suggests that ongoing tariff uncertainty and heightened risks related to Iran could be sufficient to trigger a more sustained upward trend for the precious metal.
In the United States, President Donald Trump’s 10 per cent import levy has taken effect following a Supreme Court ruling. While Trump has suggested increasing the levy to 15 per cent, no official directive has been issued. The Trump administration is also preparing national security investigations into the impact of certain imports, such as batteries and industrial chemicals, which could lead to additional tariffs. Simultaneously, some importers are pursuing tariff refunds from the government.
Concerns regarding rising sovereign debt have also influenced investment strategies, with investors shifting from bonds and currencies to hard assets like gold. This trend, known as the debasement trade, was a key factor in gold’s extended bull run before the recent pullback. As of 11.03am in Singapore, gold rose 0.9 per cent to $US5187.52 an ounce, while silver increased 2.9 per cent to $US89.67.
