Gold tops $3,330, set to soar amid tariffs and inflation fears

Gold prices are surging once again as investors grapple with a complex mix of economic and political uncertainties that continue to bolster the yellow metal’s appeal as a safe-haven asset.

- Issac John

On Tuesday, spot prices climbed above $3,330 per ounce, consolidating in a narrow range as markets balanced expectations of a breakthrough in the Ukraine conflict against lingering doubts over the US Federal Reserve's policy outlook.

The rally comes in the wake of fresh tariffs imposed by US President Donald Trump, which have rippled through global markets. Tariff receipts in July alone topped $27 billion, a record high, but analysts note these measures act like indirect taxes, raising input costs for businesses and households, fuelling inflation, and dampening sentiment. Historically, such conditions have provided fertile ground for gold, as inflationary pressures and weakening confidence in the dollar push investors toward nonyielding assets like bullion.

Attention is now fixed on Fed Chair Jerome Powell’s forthcoming speech at the Jackson Hole symposium, where markets hope for clarity on the path of monetary policy. Traders currently price in an 84 per cent probability of a 25-basis-point rate cut in September, with another possible reduction by year-end. Lower interest rates reduce the opportunity cost of holding gold, enhancing its attractiveness compared to bonds and the dollar.