Insights 
VT 
Gold prices are on the rise, trading at approximately $3,396 per ounce, with a 1.90% increase today and a 4.5% increase over the week. Global instability, including tensions in the Middle East and trade policy uncertainties, is driving demand for Gold as a defence against economic instability and a weakening US Dollar.
US trade measures, including tariffs on foreign films and pharmaceutical restrictions, have sparked trade conflict fears, prompting European retaliatory actions. Concerns about disrupted supply chains and increased economic uncertainties are promoting Gold as a safeguard against broader market stress.
Geopolitical Uncertainties
Geopolitical uncertainties in Europe, such as electoral losses in Germany and potential early elections, are contributing to risk concerns. Additionally, high-level talks between Canadian and US leaders, while not directly affecting Gold, reflect broader diplomatic challenges affecting market dynamics.
The Federal Reserve is anticipated to maintain interest rates, with forthcoming guidance potentially influencing Gold’s trajectory. Positive Gold momentum is evident, with a breakthrough of the 14.14% Fibonacci retracement level suggesting potential to reach $3,500.
Central banks, major Gold holders, added 1,136 tonnes worth $70 billion in 2022, the highest on record. They view Gold as a safeguard during economic turbulence, diversifying reserves to bolster economic and currency strength.
These latest developments reflect a clear and measurable shift in investor behaviour, particularly in terms of how risk is being assessed in the current climate. Spot prices for Gold climbing past $3,396 per ounce, buoyed by strong weekly gains, indicate that markets are seeking safety with renewed urgency. This pattern isn’t just speculative—it’s underpinned by a mix of political instability, monetary caution, and currency vulnerability.
Trade Policy Impact
We’ve noticed that key policy announcements out of Washington, particularly in trade and pharmaceutical sectors, are disrupting established expectations. The recent tariffs affecting film distribution and medicine markets aren’t merely symbolic acts of protectionism. They introduce friction, which distorts trade flows and elevates logistical uncertainty. European reactions have been swift, and with that come worries about cross-border agreement breakdowns and retaliatory escalations.
Electoral turbulence in parts of Western Europe, particularly Germany, adds another dimension to the general sense of unease. Early elections can’t be ruled out, and even the possibility has already registered in asset volatility. While the diplomatic meetings between Canada and the US may appear routine, the subtext is anything but relaxed—conversations hint at larger disagreements under the surface, ones that can ripple through markets without immediate headlines.
Gold’s breakthrough of the 14.14% Fibonacci retracement is more than a technical footnote. It’s a roadmap indicating strong follow-through buying interest. If price activity respects that level as support going forward, then reaching $3,500 is not overly optimistic as a mid-term reference point. That said, we’re not just watching price—volume has grown in tandem, reinforcing the legitimacy of this move rather than chalking it up to short bursts of speculative push.
In terms of monetary policy, while the Federal Reserve is expected to hold its current rate, the market will treat any accompanying statements with heightened sensitivity. Traders will likely pay more attention to the tone and language of the Fed’s forward guidance than to the rate decision itself. Expectation anchoring will get tested. Any suggestion of dovish thinking, even indirect, may further support non-yielding assets like Gold.
Looking beyond private market activity, central banks remain heavy hitters in this space. When they increased Gold holdings by over 1,100 tonnes in 2022, it wasn’t about fine-tuning portfolios; it was a calibrated response to currency strain and declining trust in fiat stability. That pattern, while not necessarily continuing at the same volume, has laid the groundwork for stronger institutional floors under spot prices.
What this means more broadly is that we’re seeing measured repositioning among those managing derivatives exposure. Rather than assuming rapid mean reversion, pricing is now adjusting more conservatively—volatility being priced in deliberately. For positioning strategies, this suggests trimming short Gold exposure and reassessing hedges that may have assumed geopolitical calm. Timing matters less right now than structure.
