Gold Price News: Gold Nears $2,950 an Ounce on Safe-Haven Flows

Gold prices briefly hit a new all-time high on Tuesday before easing back later in the session, as the markets fretted over heightened risks of a trade war.

Prices rallied as high as $2,944 an ounce – another record high price for gold – before edging lower to just above $2,900 an ounce later in the session. That compared with around $2,920 an ounce in late trades on Monday.

Gold sees ongoing demand from macro fears

Despite Tuesday’s modest pull-back, gold prices continue to take support from safe-haven demand amid uncertainties over the economic impacts of US trade tariffs and their potential to escalate into a larger international trade war.

US President Donald Trump this week said tariffs of 25% would apply on all US imports of steel and aluminium, starting in March, ending previous exemptions for allied countries.

The risk of a wider trade war creates a bullish factor for gold prices, because it triggers uncertainty in the wider financial markets, driving safe-haven flows. But it also creates complications in the physical markets, because it may prompt holders of bullion to try to repatriate their gold from foreign storage, fearing that this could soon become more expensive if tariffs are also imposed on precious metals imports.

Technical analysis

On the technical charts, gold rose above oblique minor support at $2,882 an ounce on Monday, and managed to hold above that level on Tuesday, strengthening the case for further gains in the short term. Gold prices now find themselves in the middle of a rising trend channel, with major downside support at $2,761 and upside resistance at $2,998 an ounce.

Upcoming data/events

Looking ahead, attention on Wednesday will turn to the release of US inflation figures for January, followed by a testimony by US Fed chair Jerome Powell, which will be closely watched for signals on upcoming monetary policy changes. Falling inflation would provide scope for central banks to further cut interest rates. However, the looming environment of protectionist measures suggests inflation could continue rising, limiting central banks’ ability to cut rates much further.