By Sarah Qureshi
(Reuters) – Gold prices inched up on Wednesday as rising concerns over U.S. President Donald Trump’s tariff plans and the Middle East boosted interest in the safe-haven asset, even as investors awaited the Federal Reserve’s policy decision later in the day.
Spot gold gained 0.2% to $3,039.38 an ounce as of 1202 GMT, after hitting an all-time peak of $3,045.24 earlier in the session.
U.S. gold futures added 0.2% to $3,046.70.
“Rising tensions in the Middle East are driving renewed safe-haven demand, with gold prices likely to gain further support as the April 2 deadline for U.S. universal tariffs approaches,” said Zain Vawda, market analyst at MarketPulse by OANDA.
“Until the economic effects of tariffs become clearer, the gold rally appears poised to continue.”
Gold, considered a safe investment amid periods of uncertainty, has scaled 15 record highs so far this year.
Investors are worried about an economic slowdown and elevated risks of recession due to U.S. President Donald Trump’s tariff policies. Elsewhere, conflict in Israel has resumed after attacks on the Gaza Strip.
Trump has floated plans for reciprocal and sectoral tariffs that will be imposed on April 2.
The market’s focus is also on the U.S. central bank policy decision due at 1800 GMT, followed by Fed Chair Jerome Powell’s comments.
“A hawkish FOMC statement from Fed Chair Powell could disrupt the rally, but such a setback may likely be short-lived,” said Vawda.
The Fed is expected to maintain its benchmark interest rate within the 4.25%-4.50% range. Money markets currently see a 98% chance of a U.S. rate cut in June, according to the CME FedWatch Tool.
Gold becomes more attractive when interest rates are low as it is a non-yielding asset.
Spot silver dropped 0.3% to $33.91 an ounce, platinum lost 1% to $987.90 and palladium fell 0.5% to $962.57.
(Reporting by Sarah Qureshi in Bengaluru; Editing by Shreya Biswas)
