Gold: Consolidation at an Extremely High Level

Ricardo Evangelista – Senior Analyst, Active Trades

The gold price rose slightly in early trading on Wednesday, consolidating above the $3,750 mark and remaining near the record high it reached in the previous session.

The precious metal is benefiting from stronger demand for safe-haven assets as tensions escalate in Eastern Europe and the Middle East, following several incidents involving Russian aircraft and drones entering NATO airspace, as well as Israel’s ongoing offensive in the Gaza Strip. The increasing geopolitical turmoil exacerbates existing risks and, coupled with tariff-induced economic uncertainty, enhances gold’s appeal, which many investors view as the ultimate safe-haven currency.

Gold Supported by Expectations of further Rate Cuts

At the same time, gold receives additional support from expectations that the US Federal Reserve will implement two more 25-basis-point interest rate cuts before year-end, with more expected in 2026. This dovish outlook is negative for the dollar and positive for gold due to the inverse price correlation between the two assets. Simultaneously, it fuels concerns that inflation could return – a scenario that underpins an optimistic outlook and could pave the way for further gains in the precious metal.

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