Gold costs fell beneath $2,880 per ounce on February 28, marking a three-week low to commerce at $2,885 at press time, as a stronger U.S. greenback and escalating commerce tensions weighed on the steel.
The decline follows President Donald Trump’s affirmation of a 25% tariff on Mexican and Canadian items, set to take impact on March 4, alongside a further 10% tariff on Chinese language imports on the identical date.
The tariff measures have fueled investor considerations, strengthening the greenback and decreasing demand for gold.
Regardless of the pullback, gold stays one of many best-performing belongings of the 12 months, having hit a number of all-time highs in current classes.
The steel has gained 8.98% year-to-date (YTD), pushed by safe-haven demand, expectations of Federal Reserve fee cuts, and elevated inflows into bullion-backed exchange-traded funds (ETFs).
For individuals who invested $1,000 in gold at first of 2025, that funding would now be value roughly $1,089.80, reflecting a acquire of $89.80 inside just some months. Nevertheless, buyers are actually turning their consideration to key inflation knowledge and the Federal Reserve’s subsequent coverage strikes, which might dictate gold’s trajectory within the close to time period.
Can Gold resume its uptrend?
Regardless of its current decline, gold stays positioned for additional beneficial properties, supported by safe-haven demand, geopolitical dangers, and ongoing considerations over Trump’s commerce insurance policies.
Nevertheless, the stronger U.S. greenback has tempered its short-term upside, leaving its future efficiency depending on key financial indicators and Federal Reserve coverage selections.
The U.S. Private Consumption Expenditure (PCE) Worth Index, the Fed’s most well-liked measure of inflation, is about for launch on February 28, and the info is anticipated to supply additional readability on the central financial institution’s financial coverage outlook.
If inflation stays increased than anticipated, the Fed might delay fee cuts, probably boosting the greenback and including additional strain on gold costs.
Amid these developments, AI-driven fashions, together with projections from ChatGPT, estimate that gold might attain $3,000 per ounce by the tip of Q1 2025, aligning with long-standing forecasts, with banking large Citi (NYSE: C) additionally elevating its gold worth goal for the following three months to $3,000 per ounce.
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