Consolidation

We are gradually getting used to the fact that the first digit of the US dollar gold price is a 3, and although it was unable to defend the record high of 3,057.50 US$ per ounce reached on 20 March, it has remained steadily above the 3,000 mark, with the exception of an extremely brief setback on Friday.

Most recently, two groups of buyers supported the gold price: for the first time in six weeks, speculatively oriented investors increased their long positions on the US futures exchanges last week. In addition, investors bought roughly 750,000 ounces, worth around US$2.27 billion, in the form of ETCs on Monday, the strongest single-day demand since 21 January 2022. A total of 87.8 million ounces are now invested in ETC worldwide, with a recent strong upward trend, particularly due to new buyer groups in Asia. In addition, gold prices have recently benefited from advance purchases due to possible US import tariffs, although setbacks are likely as soon as these inventories are reduced.

Trump tariffs could further boost gold demand

Another surge in gold demand is likely in early April as a safe haven investment, as the US government has announced so-called ‘reciprocal tariffs’ from 2 April, although the uncertainty is currently further growing due to recent, strongly diverging statements by US President Trump.

Sharp decline in US consumer confidence

A visible sign of this is the further deterioration of US consumer sentiment. The Conference Board Consumer Confidence index dropped for the fourth consecutive time to its lowest level since January 2021, plunging to 65.2 points, its lowest level since 2013. By contrast, inflation expectations over the next twelve months rose further, this time by 0.4 percentage points to a remarkable 6.2 per cent. In this uncertain environment and with burgeoning inflation fears, the demand for gold is all too understandable.

Gold gains traction above 3,000 US$ mark

Last Thursday morning, gold traded at 3,046 US$ per ounce after its record high. On Friday afternoon, it briefly slid marginally below the 3,000 mark (profit-taking before the weekend?). The precious metal recovered quickly and yesterday, at 3,036 US$ per ounce, it traded at its weekly high. In European trading, gold started trading this morning (Wednesday) at 3,024 US$ per ounce.

Xetra-Gold above 90 € per gram

The Xetra-Gold price benefited from the slight weekly decline of the euro against the US dollar. It rose from 89.90 € per gram last Thursday morning to 90.30 on the same day but dropped noticeably on Friday to 89.10. Xetra-Gold recovered to 90.25 yesterday and is likely to kick off today’s European trading day at 90.15 € per gram, if the level of 7:00 remains current at the opening of trading.

On Friday, market participants are likely to look eagerly to the publication of the PCE core rate, the Fed’s preferred measure of inflation. Next week will see the moment of truth in terms of US tariffs.

I wish all readers a happy rest of the week.