On Wednesday, amid escalating trade tensions and the latest U.S. employment data, investors continued to flock to safe-haven assets, keeping gold firmly above the $3,350 per ounce mark. At 10:30 AM ET, spot gold had risen 0.6% to reach $3,372.70 per ounce, nearly touching a one-month high set earlier this week. Meanwhile, New York gold futures edged up by 0.5% to $3,395.10 per ounce, with the U.S. dollar index declining by approximately 0.4%.
The latest U.S. data revealed that monthly job growth in the private sector hit its lowest level in years, intensifying concerns among investors over the economic impact of tariffs. In reaction to these figures, President Trump pressured the Federal Reserve to consider cutting interest rates. Additionally, the ongoing trade tensions between the U.S. and China have kept market volatility and gold prices elevated, with Trump remarking on Tuesday evening that China is “extremely tough” and hard to negotiate with.
Gold has surged approximately 28% this year, now trailing only about $150 below the historic peak reached in April, as investors increasingly turn to precious metals to mitigate risks associated with the tariff war.
Ole Hansen, Head of Commodity Strategy at Saxo Bank, noted that a supportive macroeconomic environment is fueling a breakout for both gold and silver, potentially even paving the way for record-breaking highs. Hansen reported that while many strategists—including himself—had anticipated a prolonged period of market consolidation, precious metals have defied expectations by showing significant upward momentum.
The market narrative shifted rapidly in early June: gold, and even more so silver, broke through key technical resistance levels. A notable catalyst for this shift was the decline in the U.S. dollar index, with Bloomberg’s Dollar Spot Index nearing a two-year low. Beneath the surface, renewed geopolitical risks and the reemergence of trade war concerns are further bolstering the bullish sentiment in precious metals.
Hansen further explained that, over the decades, substantial global current account surpluses—which have complemented the U.S.’s persistent deficits—had flowed into American assets, supporting a strong dollar. However, this dynamic is now in doubt. Trade protectionism and intensifying political polarization are evolving from temporary issues into structural risks, prompting sovereign wealth funds and institutional investors to rebalance away from heavy exposure in U.S. equities and Treasuries. This reallocation has driven gold prices higher as worries over U.S. fiscal sustainability grow.
According to Hansen, gold has broken away from the downtrend following the April record high of $3,500 per ounce. The previous resistance at $3,325 has now turned into a support level, with additional support noted at $3,280 and around the 55-day moving average at $3,223. Although it remains uncertain whether gold can imminently reach new highs, the overall macro setup appears to favor precious metals. A combination of factors—ranging from post-stimulus fiscal pressures and tariff-induced supply shocks to declining consumer confidence, a weakening labor market, and reduced real spending power—might prompt the Federal Reserve to pivot more dovishly than expected, potentially pushing gold prices toward $4,000.
Conversely, Carley Garner, co-founder of DeCarley Trading, offered a more cautious perspective. Despite gold reaching a four-week high, Garner contends that the historic peak of $3,500 set in April may represent a short-term ceiling. She noted that while gold remains an attractive long-term investment, its rapid recent climb has raised concerns. Garner also pointed out that both the U.S. dollar and Treasuries appear to be in extremely oversold territory, suggesting that investors should remain alert to potential market reversals.
