Merely a brief slowdown

Last Friday, gold prices dropped by roughly two per cent shortly before the close of trading. The development underlined the fact that the record chase for gold prices is not a one-way street. With no specific fundamental cause, the price setback was likely due to profit-taking by speculatively minded market participants. However, it was also short-lived, and the precious metal reached a new record high yesterday.

Investors’ decisions influenced by uncertainty about US tariffs, war in Ukraine 

The demand for safe havens will likely continue. On Tuesday evening, US President Trump once again hinted that tariffs of up to 25 per cent could be imposed on automotive, semiconductor and pharmaceutical imports. An announcement to this effect could be made as early as 2 April. When asked about levies on pharmaceuticals and semiconductor chips, he went on to say: “It’ll be 25 per cent and higher, and it’ll go very substantially higher over the course of a year.” US-Russian talks and their consequences for European countries are equally concerning to the financial markets. They do not like uncertainty, and investors are making fervent diversification efforts by means of supposedly safe havens.

Macroeconomic data play a somewhat secondary role here – a fact unlikely to change until early March.

Gold in US dollars hits record high on Wednesday

Last Thursday morning, gold traded at 2,920 US$ per ounce and had risen to 2,940 by Friday morning. On Friday afternoon and evening, it dropped off noticeably, as mentioned above, to 2,877. On Monday, gold once again reached the 2,900 US$ per ounce mark and set a new record at 2,947 yesterday morning before running out of steam (renewed profit taking?). It retreated by around 30 US$ per ounce but quickly recovered, kicking off trading this morning at 2,946, just below the record high – in fact trading briefly at 2,946.90 US$ per ounce.

Xetra-Gold back above €90 per gram

Xetra-Gold came close to its all-time high of the previous week, initially dropping from 89.85 € per gram last Thursday morning to 88.50 on Friday. It rose to 90.90 yesterday morning (5 cents below the previous week’s record) before falling back to 90.20 in the afternoon. It recovered late yesterday afternoon and is expected to start trading today at around 90.80 € per gram.

Tomorrow (Friday), the focus of interest will likely be on the Eurozone purchasing managers’ indices. In the medium term, the markets will continue to closely watch statements and nuances of rhetoric regarding US geopolitical and trade policy.

I wish all our readers a sunny taste of spring, which is expected this weekend.