"Gold remained close to historic highs on Thursday. Caution dominates despite a slight easing in geopolitical tensions between the US and Europe. While some uncertainty has been reduced over the near-term, sentiment remains in check, keeping demand for defensive assets elevated. US President Donald Trump stepped back from previously announced tariff threats against several European countries following discussions with NATO leadership. The shift points to a tentative diplomatic understanding around Greenland's future."
"However, key details remain unresolved, particularly around governance and control, leaving room for further tensions to resurface. Beyond Europe, multiple global flashpoints continue to support gold's appeal, with tensions in Eastern Europe and the Middle East remaining elevated. Adding to the supportive backdrop, structural concerns in Japan are also gaining attention. Rising fiscal uncertainty is reinforcing fears of financial fragility, which favour gold."
Gold is trading near historic highs as investors favour defensive assets amid persistent geopolitical and fiscal risks. Caution persists despite a slight easing in tensions between the US and Europe after the US stepped back from announced tariff threats following NATO discussions. Unresolved issues around Greenland's governance and control leave potential for renewed friction. Additional flashpoints in Eastern Europe, the Middle East, and structural concerns in Japan support safe-haven demand. Rising fiscal uncertainty heightens fears of financial fragility and reinforces gold's appeal. Market focus shifts to upcoming US GDP and PCE releases, which could alter expectations for monetary policy and rate cuts.
Read at London Business News | Londonlovesbusiness.com
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