Gold prices soared to an all-time high on Wednesday, briefly crossing $3,350 per troy ounce, driven by safe-haven demand amid escalating global trade tensions and expectations of looser U.S. monetary policy.

June gold futures on the New York Comex exchange surged by $113.39 to $3,353.79 before pulling back below $3,300 during the U.S. session as investors locked in profits ahead of a key speech by Federal Reserve Chair Jerome Powell.

The rally came as markets grappled with intensifying trade disputes, including former President Donald Trump’s tariffs and China’s retaliatory 125% counter-tariffs. Investors also anticipated a potential 1% rate cut by the Fed in 2025, fueled by fears that trade disruptions could slow economic growth. The U.S. dollar, weakened to its lowest level since April 2022, further bolstered gold’s appeal.

In a Chicago address, Powell cautioned that Trump’s tariffs could spark both temporary and persistent inflation, potentially complicating the Fed’s dual mandate of price stability and full employment. “Policymakers could find themselves in the challenging scenario in which our dual-mandate goals are in tension,” Powell said, highlighting the risks of trade policy to monetary decisions.

Market analysts noted signs of overbought conditions, with the Relative Strength Index (RSI) signaling caution on daily and 4-hour charts. Profit-taking and uncertainty surrounding Powell’s remarks contributed to the late-session decline. Despite the pullback, gold remains supported by geopolitical uncertainty and rate-cut expectations.

In Asia, China reported stronger-than-expected 5.4% economic growth in Q1, but investor sentiment stayed cautious amid trade frictions. Chinese President Xi Jinping’s regional tour, promoting China as a stabilizing force in global trade, underscored the contrast with Washington’s protectionist stance.

Technically, gold’s short-term support lies between $3,245 and $3,230, with $3,200 as a potential floor for deeper declines. Analysts view the retreat as a buying opportunity, expecting gold’s uptrend to persist as macroeconomic uncertainties unfold. (ILKHA)