Gold Shines as Global Markets Jitters Fuel Safe-Haven Demand
Gold Prices Surge on Growing Economic Uncertainty
Global markets are on edge, driven by a mix of US economic woes and escalating trade tensions. Gold, often seen as a safe haven asset during times of uncertainty, is reaping the benefits, with prices pushing to a two-week high.
US Debt and Trade War Fears Weigh on Dollar
Moody’s recent downgrade of the US credit rating, citing a massive national debt, has further fueled anxiety. Adding to the pressure, President Trump’s threat of hefty tariffs on European imports, including Apple iPhones, sent shockwaves through markets. The US dollar weakened as a result, helping to push gold prices higher.
Gold Finds Support in Chinese Demand and Geopolitical Tensions
The rally in gold is further bolstered by strong demand from China, even with high prices, and escalating geopolitical tensions in the Middle East. These factors are driving investors to seek safe haven assets like gold.
Gold Futures Climb in India
In India, MCX Gold Futures have also enjoyed a strong week, closing at their second-highest weekly level. Technical indicators point to continued upward momentum in the coming week, with potential resistance at Rs 97,600 and initial support at Rs 94,000.
Silver Rises, Base Metals Mixed
Silver also benefited from the safe-haven demand, rising by 3 percent. Base metals, however, experienced mixed performance. Copper saw gains due to tight supply and strong Chinese demand, while aluminum fell due to rising inventories and increased production in China.
Oil Price Volatility Driven by Geopolitics and OPEC+ Decisions
Oil prices underwent a dramatic ride this week. Fears of supply disruptions from a potential Israeli strike on Iranian nuclear sites initially pushed prices higher. However, reports of a potential large production increase by OPEC+ and rising US crude inventories caused prices to drop. Oil ultimately rebounded somewhat on Friday, driven by renewed focus on US-Iran nuclear talks.
Key Economic Data Points Ahead
Next week, investors will be closely watching key economic data releases, including FOMC meeting minutes, jobless claims, and preliminary GDP estimates. The most anticipated data point is core PCE, the Fed’s preferred inflation gauge, which will provide further insights into the central bank’s stance on interest rates.
Trade Tensions Remain a Source of Uncertainty
President Trump’s ongoing trade war rhetoric, including threats of tariffs on tech giants, is adding to the market volatility. The stalled US-EU trade talks further fuel uncertainty in the already fragile global economy.
