Gold prices continued to rise on Wednesday, building on the record high achieved in the previous session, as investors turned to the safe-haven metal in light of the potential effects of U.S. reciprocal tariffs.
In the UAE, gold rates saw an increase, with 24-carat gold climbing AED1.75 to reach AED377.75, while 22-carat gold rose by AED1.5 to AED349.75. Furthermore, 21-carat gold saw a rise of AED1.5 to AED335.25, and 18-carat gold edged up by AED1.25 to AED287.50.
Spot gold was up 0.7 percent at $3,131.25 per ounce as of 02:40 GMT. The bullion reached an all-time high of $3,148.88 on Tuesday.
U.S. gold futures increased by 0.4 percent, reaching $3,159.90.
Economic outlook and gold predictions
A potential U.S. economic slowdown, the likelihood of rising inflation, and interest rate cuts may pave the way for gold to hit $3,300 in the upcoming months, according to analysts. Anticipation surrounds the market ahead of the U.S. tariffs set to be implemented later in the day, which President Donald Trump has referred to as “Liberation Day.” Trump’s tariff policies could incite inflation, hinder economic growth, and intensify trade disputes.
Read more: UAE gold prices gain AED3.75, global rates climb to new high on Trump’s tariff plans
Gold as a hedge
Gold, recognized as a safeguard against global instabilities and inflation, tends to flourish in a low-interest-rate environment. The White House has affirmed that new tariffs will be enforced, but specific details regarding their size or scope have yet to be revealed. The rally in bullion prices has also been driven by robust central bank demand, expectations of interest rate reductions by the Federal Reserve, geopolitical tensions in the Middle East and Europe, and heightened investments in gold-backed exchange-traded funds.
Future market scenarios
“The market could test $3,400 per ounce over the next nine months in a bull case scenario,” remarked Aakash Doshi, global head of gold strategy at State Street Global Advisors. Federal Reserve officials are apprehensive that employment could decline, yet the threat of tariff-induced inflation constrains their capacity to respond.
Markets are now awaiting the ADP employment report scheduled for later in the day, along with the non-farm payrolls report due on Friday. Spot silver increased by 0.2 percent to $33.82 per ounce, platinum rose by 0.8 percent to $987.66, and palladium advanced by 0.7 percent to $990.45.
