Gold prices dipped slightly in Asian trade on Wednesday but continue to hover near record highs as investors react to Donald Trump’s newly proposed tariff threats. The market remains on edge, awaiting clarity from the Federal Reserve.

Major Market Influencers

Trump’s Proposed Tariffs

Trump has suggested 25% tariffs on various sectors including autos, pharmaceuticals, and semiconductors. Market reactions suggest that participants view these threats more as negotiation strategies than imminent economic disruptions.

Federal Reserve Rate Uncertainty

Investors are keenly awaiting FOMC minutes from January for insights into the Fed’s future actions. Any signs of delayed rate cuts might limit gold’s upside potential.

Global Political Dynamics and Their Impact on Safe-Haven Demand

Ongoing peace negotiations regarding the Russia-Ukraine conflict have led to some profit-taking in gold. Nevertheless, persistent uncertainties around global trade uphold gold’s status as a valuable safe-haven asset.

Current Gold Price Overview

Spot Gold: $2,929.02/oz (-0.2%)
Gold Futures (April): $2,946.22/oz (-0.1%)

Future Outlook for Gold Prices

Bullish Scenario: If tariff threats escalate or the Fed signals rate cuts, gold prices could test the $3,000 mark.
Bearish Scenario: If peace talks progress, and rate levels remain high, a pullback in gold prices is possible.

With rising geopolitical risks, gold serves as an essential hedge in these uncertain markets.