(Kitco Commentary) - Gold futures experienced a volatile trading session today, initially surging to a new all-time high before retreating on profit-taking, only to recover much of those losses by the close of trading.
April gold futures opened at $3,058.00 and quickly climbed to $3,065.20 within the first hour of trading, establishing a new record high. However, the precious metal's momentum soon reversed as traders capitalized on the rally to secure profits. Over the next six hours, prices declined steadily to reach an intraday low of $3,032.80 before rebounding to settle at $3,043.80, representing a modest gain of $2.60 for the session.
"Speculators are trying to take advantage of the market and take some profit off the table," explained Alex Ebkarian, Chief Operating Officer at Allegiance Gold. "I think anytime gold sets a high, we see a little bit of resistance." Ebkarian also noted that gold hasn't yet fully engaged its traditional role as a safe-haven asset: "Gold is not even acting as a safe-haven asset yet to retail investors because technically we're not in a recession. We are seeing the slowdown in the economy and that could very well create further uncertainty and more desire for safe-haven assets."
The precious metal's movements come just a day after the Federal Reserve concluded its March Open Market Committee meeting, where members voted unanimously to maintain interest rates at their current level between 4.25% and 4.50%. During the post-meeting press conference, Fed Chairman Powell addressed concerns regarding the current administration's trade policies, suggesting they may have contributed to slower U.S. economic growth while increasing inflationary pressures.
In their official statement, Fed officials projected slower economic growth coupled with rising inflation, specifically highlighting concerns about the Trump administration's trade approach. They characterized these policies as "ambitious and frequently erratic," concluding that they have placed both the economy and the Federal Reserve's ability to maintain stability "under increasing pressure."
Hours after the Fed's decision, President Donald Trump criticized the central bank on Truth Social, writing: "The Fed would be MUCH better off CUTTING RATES as U.S. Tariffs start to transition (ease!) their way into the economy," adding, "Do the right thing." This swift reaction demonstrates how quickly the president is willing to exert pressure on the Fed, despite the long-standing tradition of central bank independence from political influence.
Market participants have now shifted their focus from monetary policy to the administration's trade measures and their potential repercussions. With import tariffs from Canada and Mexico fixed at 25% and a 20% tariff on Chinese imports, investors worldwide are bracing for the inevitable impact of higher prices resulting from these tariffs and the reciprocal measures other countries may implement in response.
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Wishing you, as always good trading,
