Gold hit a record high on Wednesday, driven by rising tensions in the Middle East and uncertainty over U.S. tariffs, which increased the metal’s appeal as a safe haven. Traders were also waiting for the Federal Reserve’s decision later in the day.
Spot gold rose 0.2% to $3,039.38 per ounce by 0745 GMT. During the session, it reached a new peak of $3,045.24, marking its 15th record high this year.
U.S. gold futures rose 0.2% to $3,046.40.
“At its current pace, gold futures could reach $3,200 in just over a month. Even if there are some setbacks along the way, I believe buyers are waiting for any price drop, no matter how small,” said Matt Simpson, senior analyst at City Index.
Investors are concerned about a potential economic slowdown and heightened recession risks due to U.S. President Donald Trump’s trade tariffs, which are expected to increase inflation.
The tariffs, which have worsened trade tensions, include a 25% levy on steel and aluminum that took effect in February, along with additional tariffs set to be imposed on April 2.
“There seems to be little standing in gold’s way right now. Renewed geopolitical tensions in the Middle East, rising global economic risks, and tariff uncertainties are all boosting its appeal as a safe-haven asset against market volatility,” said IG market strategist Yeap Jun Rong.
Israeli airstrikes in Gaza have killed over 400 people, with Israel warning that the attacks are “just the beginning.”
The Federal Reserve, which is wrapping up a two-day policy meeting later today, is expected to keep its benchmark interest rate unchanged in the 4.25%-4.50% range.
“If the FOMC meeting takes a dovish tone due to growing concerns about how tariffs may affect growth, this could give gold the boost it needs to surpass $3,050,” said Tim Waterer, chief market analyst at KCM Trade.
Gold, which does not yield interest, performs well in a low-interest-rate environment.
Markets are also awaiting a speech from Fed Chair Jerome Powell at 1830 GMT for more insight into the policy outlook.
Meanwhile, spot silver dropped 0.4% to $33.89 per ounce, platinum declined 0.7% to $989.95, and palladium fell 0.7% to $960.68.
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