Gold is holding firm and strengthening its position in international markets as global investors remain reliant on the commodity’s safe-haven appeal.
The noble metal’s bare-market performance also comes in the wake of ongoing tensions between Iran and the United States.
The current tension, with the US Navy strategically deployed in the Indian Ocean and Mediterranean, stems from a timeline of 10-15 days that President Donald Trump gave Tehran to stop uranium enrichment.
Om February 26, Iran had 4-9 days left to bow to US pressure on its nuclear armaments programme, which it denies.
Reuters reported on Wednesday that spot gold rose 1.1% to $5,202.28 per ounce, by 2pm, Eastern Time in the US.
American gold futures for April delivery settled about 1% higher at $5,226.20.
"There's an inflationary impact from tariffs and high oil prices, especially if an attack is imminent, and I think there's also some hedging by investors, who may be turning to gold," said Bart Melek, global head of commodity strategy at TD Securities.
Much of the investment in gold is also because of pressure the Trump Administration has itself to blame for – “Trump tariffs.”
This is after Washington announced a temporary 10% global import tariff on Tuesday.
Initially, Trump struck back at last Friday’s Supreme Court appeal defeat about last April’s “reciprocal tariffs” by announcing a 10% blanker tariff on all imports the following Saturday.
On Sunday he dialed up the trade pressure by announcing that the tariffs would be increase to 15%, valid for a period of 150 days.
When his latest tariff level finally settled on 10% by February 24, the damaged had already been done, causing investors to retreat into gold.
Reuters reports that the gold price has scaled 20% so far this year.
As always, there’s a downside.
“Investors have slowed the pace at which they increase their exposure to gold. Hence, we factor in a period of potentially weaker gold prices into spring, although the resurgent tariff uncertainty may make the period of consolidation relatively short-lived,” Bank of America (BofA) said in a note, adding that it expects prices to hit $6,000 per ounce over the next 12 months.
As for silver, the spot price climbed 3.9% to $90.73 per ounce, a three-week high. On January 29, silver scaled an all-time peak of $121.64.
BofA noted that the white metal could rise again above $100 per ounce this year.
