Image Credit: Bloomberg

Gold Rises as Trade War Concerns Boost Support for Havens

Gold prices advanced on Tuesday as rising trade tensions reignited investor interest in safe-haven assets. With geopolitical uncertainty once again casting a shadow over financial markets, the precious metal regained upward momentum, supported by risk-off sentiment and declining appetite for equities.

Safe-Haven Demand Strengthens Amid Trade Tensions

Spot gold (XAUUSD) climbed 0.6% to around $3,355 per ounce, rebounding from last week’s mild pullback. Futures also advanced as investors shifted capital into assets perceived as safer amid escalating rhetoric between the U.S. and key trading partners. Yahoo!Finance

Renewed fears of a trade war — triggered by the possibility of additional tariffs and strained diplomatic ties — have pushed investors to hedge against broader market volatility. Gold, a traditional hedge during times of economic and geopolitical stress, has benefitted from this risk-averse positioning.

In addition to trade-related fears, continued concerns about inflation and weakening global growth have fueled the safe-haven rally. While inflation in the U.S. remains elevated, recent macro data from Europe and Asia point to slowing momentum, prompting investors to diversify their holdings. Moneyweb

Dollar Strength Caps Gains, But Outlook Remains Firm

The strength of the U.S. dollar did act as a headwind, limiting gold’s upside potential. The dollar index hovered near a multi-month high, making gold more expensive for holders of other currencies. However, the overall tone in the market remains cautiously bullish for bullion, especially if trade disputes escalate or central banks adopt a more dovish stance. Investing.com

From a technical standpoint, gold remains supported above key moving averages, with traders watching the $3,370–$3,380 resistance zone for breakout confirmation. A sustained move above this level could trigger further gains, especially if global risk sentiment continues to deteriorate.

 

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