Introduction to Gold Prices
The gold price has been on a continuous rise, reaching new heights. After trading at a low of US$3,006 per ounce on Monday, March 24, the yellow metal surged midway through the week, closing at US$3,085 on Friday, March 28. Several factors are contributing to this upward trend, including long-term underlying drivers like central bank buying, as well as recent turmoil surrounding tariffs, the US economy, and global conflicts.
Factors Influencing Gold Prices
Tariffs have been a significant focus this week, with US President Donald Trump signing an executive order to impose 25 percent tariffs on all automobile imports starting on April 3. Trump’s reciprocal tariffs are also set to go into effect on the same day. According to Dana Samuelson of American Gold Exchange, gold itself is unlikely to face tariffs due to its status as a tier-one asset, equivalent to a Treasury. However, silver, which has strong industrial applications, could face tariffs.
Copper and Tariffs
Copper is another metal that has been affected by the tariff situation. Trump previously ordered the Department of Commerce to investigate copper tariffs, and while the report was supposed to be released within 270 days, sources indicate it could come sooner. This news has bolstered prices for the red metal, with copper futures on the Comex in New York rising to an all-time high.
Federal Reserve Meeting
The US Federal Reserve meeting last week also had an impact on gold prices. The central bank left rates unchanged, but officials are still calling for only two cuts this year. However, Danielle DiMartino Booth of QI Research believes the Fed could cut as many as four to five times in 2025 due to the pace of layoffs and bankruptcies in the US economy.
US Personal Consumption Expenditures Price Index
The latest US personal consumption expenditures (PCE) price index data was released on Friday, showing that core PCE was up 0.4 percent month-on-month in February, the largest gain since January 2024. On a yearly basis, core PCE was up 2.8 percent, both numbers higher than analysts’ estimates. The PCE is the Fed’s preferred gauge for inflation and is expected to impact its next rate decision.
Silver Squeeze 2.0
In the precious metals space, silver is gaining attention as social media users plan a "silver squeeze 2.0" for this coming Monday, March 31. The movement, which originated on X, formerly Twitter, aims to squeeze the market like the 2021 silver squeeze. The white metal’s price has already started to move, rising to the US$34.50 per ounce level on Thursday, March 27, before pulling back to around US$34.10 by Friday’s close.
Conclusion
In conclusion, gold prices continue to rise due to a combination of long-term underlying drivers and recent market turmoil. The Federal Reserve meeting and US personal consumption expenditures price index data have also had an impact on gold prices. Meanwhile, silver is gaining attention with the planned "silver squeeze 2.0," which could lead to further price movements in the precious metals space. As the market continues to evolve, it’s essential to stay informed and up-to-date on the latest developments and trends.
