Breathless

Over the past few days, the gold prices continued to skyrocket, breaking record after record before running out of steam and seeing the first wave of profit-taking. The focus remains on the uncertainties surrounding US tariffs, which entered a new phase with the announcement of 25 per cent tariffs on steel and aluminium as of 12 March and the additional announcement of reciprocal tariffs (i.e. any state imposing tariffs on US imports will be subject to tariffs of the same amount for exports to the US) entered a new round. The lack of clarity as to which tariffs will actually be implemented and at what time continues to fuel the demand for safe haven investments.

Markets look to US data and foreign policy

Even the unexpectedly robust US labour market data for January, published last Friday, which resulted in higher US yields and a firmer US dollar, only slowed gold for a very short period. When the US consumer price data for January, published yesterday, also exceeded forecasts, the rise in US government bond yields continued, putting short-term pressure on gold prices. After reports of a call between US President Trump and Russian President Putin, which raised hopes for an end to the Ukraine war, the US dollar weakened considerably, especially against the euro. This, in turn, pushed gold prices back above the 2,900 US$ per ounce mark by the evening.

Gold breaks 2,900 US$ per ounce record

Gold initially rose from 2,860 US$ per ounce last Thursday to 2,900 at the beginning of this week in the wake of news regarding US tariffs. On Tuesday, it marked a new record high at 2,942 before retreating to 2,880 on Tuesday afternoon after profit-taking, and then to 2,865 yesterday following the publication of US consumer price data. Yesterday evening, however, it had already rebounded to 2,906 and this morning it started the new trading day at a robust 2,920 – that is 60 US$ or a good 2 per cent higher than last Thursday.

Xetra-Gold at record high

The price of Xetra-Gold also reached new all-time highs, rising from 88.55 € per gram last Thursday morning to a record of 90.95 at the start of trading on Tuesday, before falling back to 89.00 yesterday afternoon. After recovering late yesterday afternoon, Xetra-Gold is expected to start the trading day at around 89.85 € per gram this morning.

Despite a wealth of interesting economic data in the coming days, the markets are likely to remain primarily under the spell of financial and trade policy decisions in the US.

After this spectacular week, I wish all readers a relaxing weekend.