Gold rises for the second consecutive day
Gold prices continued their gains for the second consecutive day, with the yellow metal settling above $5,170 an ounce during trading on Thursday, hovering near its highest level in about four weeks.
This strong performance comes amid escalating geopolitical tensions and continued uncertainty over US trade policies.
Tensions in the Middle East support demand for gold
The strengthening of the US military presence in the Middle East has kept investors on edge, especially with the upcoming nuclear talks in Geneva approaching.
Washington has also stepped up pressure on Tehran by imposing new sanctions targeting entities linked to oil and arms exports, which has boosted demand for gold as a safe haven.
Negotiations between the US and Iran remain the most influential factor affecting market movements at the moment, with investors watching for any signs that could redraw the geopolitical risk map.
US tariffs increase market uncertainty
The Trump administration continues to adhere to its global tariff strategy, raising concerns among trading partners and bringing tension back to the global trade scene.
A 10% tariff came into effect after the Supreme Court ruled to overturn previous reciprocal tariffs, while Trump indicated that tariffs could be raised to 15% if necessary, adding to uncertainty about the outlook for global trade and growth.
Interest rate and inflation expectations support the yellow metal
On the monetary policy front, ongoing concerns about inflation have led traders to postpone expectations of an interest rate cut by the Federal Reserve until September.
The continuation of high interest rates for a longer period is an influential factor in gold's movements, especially given the inverse relationship between real yields and the performance of the precious metal.
What is driving gold now?
The most significant factors currently affecting gold prices can be summarized as follows:
- Developments in negotiations between the US and Iran
- Escalating geopolitical tensions in the Middle East
- The path of US tariffs
- US interest rate and inflation expectations
Ultimately, as long as political and trade uncertainty persists, gold is likely to remain supported above the psychologically important $5,000 level, with the potential to test new highs if risks escalate.
Gold currently remains supported by multiple factors, making it one of the most prominent assets that investors will be watching in the coming period.
