HG MARKETS:

Gold prices continued their historic ascent this week, with the precious metal notching its third record high in just five days. The safe-haven asset is gaining traction as geopolitical and economic concerns deepen, prompting investors to reduce risk exposure and seek shelter in more stable assets.
The latest surge in gold came on the heels of escalating trade tensions between the United States and China. U.S. President Donald Trump announced an investigation into rare earth imports from China, potentially paving the way for new tariffs. This move has amplified fears of a renewed trade war, just as markets were starting to regain a degree of confidence in global economic stability.
At the same time, the U.S. dollar weakened significantly, further lifting gold. The dollar’s decline reflects growing investor anxiety as the currency lost momentum against a basket of global peers. The softer dollar typically enhances gold’s appeal by making it cheaper for holders of other currencies.
Contributing to the metal’s rise was Federal Reserve Chair Jerome Powell’s latest speech, which tempered expectations for interest rate cuts. Powell emphasized the central bank’s commitment to controlling inflation, warning that one-off price increases should not be allowed to evolve into persistent inflationary trends. His comments sparked a shift in sentiment among market participants who had been betting on multiple rate cuts this year.
While Powell did not rule out future easing, he also cautioned that the Fed faces a potential balancing act between managing inflation and supporting economic growth. This has raised concerns about a possible stagflation scenario—a challenging mixes of sluggish growth and stubbornly high prices. Against this backdrop, the allure of gold as a store of value has only grown stronger.
Recent U.S. economic data offered a mixed picture. Retail sales figures came in stronger than expected, largely supported by robust auto purchases. However, manufacturing indicators revealed a slowdown, adding another layer of uncertainty to the outlook. Meanwhile, yields on U.S. government bonds declined, which typically benefits non-yielding assets like gold.
With market volatility high and the global outlook uncertain, gold remains firmly on an upward path, with technical indicators pointing toward the possibility of testing even higher levels in the near future.