Gold Price Nears Record High Amid Strong Safe-Haven Demand.

Gold Price Hovers Near Record High as Safe-Haven Demand Surges Amid Global Uncertainty

Gold prices (XAU/USD) remain near all-time highs, struggling to attract significant buying momentum on Monday. Despite this, the precious metal stays above the crucial $3,000 psychological threshold reached last Friday, driven by ongoing geopolitical tensions, trade concerns, and expectations of further interest rate cuts by the Federal Reserve (Fed).

Key Factors Driving Gold Prices

1️⃣ Geopolitical Tensions Fuel Safe-Haven Demand
Global geopolitical risks continue to support gold prices as investors seek safety. Escalating conflicts in the Middle East, including rising tensions in Yemen and Gaza, have intensified market uncertainty. Recent US airstrikes and retaliatory threats from Houthi militants highlight the potential for further instability, adding to gold’s appeal as a safe-haven asset.

2️⃣ Federal Reserve Rate Cut Speculations Keep USD Weak
The US Dollar (USD) remains under pressure near multi-month lows, with market participants anticipating multiple Fed rate cuts this year. Weak US economic data, including a cooling labor market and softer inflation figures, has reinforced expectations that the Fed could lower borrowing costs at its June, July, and October meetings. A weaker dollar typically boosts gold prices, as it makes the metal more attractive to international buyers.

3️⃣ US Trade Policies & Economic Concerns
Uncertainty surrounding US trade policies, particularly fears of escalating trade tensions and potential economic fallout, is driving investors toward gold. Comments from US Treasury Secretary Scott Bessent indicate that while market corrections are normal, recession risks remain, further increasing gold’s attractiveness.

4️⃣ China’s Stimulus Measures & Equity Market Impact
China’s State Council announced a new plan to stimulate domestic consumption, along with easing property market policies in Shenzhen. These measures have bolstered investor confidence, leading to a rally in Asian equities. However, this optimism has somewhat capped gold’s upside momentum.

What’s Next for Gold Prices?

Investors are closely watching Monday’s US economic data releases, including Retail Sales and the Empire State Manufacturing Index, for further market direction. However, the spotlight remains on the upcoming FOMC meeting on Wednesday, which is expected to provide key insights into the Fed’s monetary policy outlook.

With ongoing geopolitical tensions, a weakening USD, and persistent rate cut expectations, gold bulls remain in control, making the precious metal a key asset to watch in the coming weeks.