Gold has bounced back above $2,900 per ounce after Monday’s slight decline. The earlier drop happened during a market selloff sparked by President Trump’s warning about economic challenges from his new tariff policies.
While gold typically serves as a safe haven during uncertainty, it can face pressure when investors need cash during market turmoil. The precious metal has risen 11% in 2024, repeatedly breaking records. This growth stems from three main factors: concerns about Trump administration policies, increased buying by central banks, and expectations that the Federal Reserve will cut interest rates further—a move that benefits non-yielding assets like gold.
Physical demand has weakened in key markets like India and China. However, investment in gold-backed ETFs has reached its highest level since December 2023.