Gold Pulls Back from Record High
Gold prices extended their pullback to below $3,280 per ounce on Tuesday after hitting a record of $3,500 the prior session, contrasting with the rally in other dollar-denominated financial assets that benefitted from expectations of a de-escalation in the trade war between the US and China.
US President Trump stated tariffs against would not remain at their current high level and dismissed the earlier threat against the autonomy of the Federal Reserve. The possibility of a return to higher trade flows softened concerns that trade barriers and unpredictable economic policy could threaten the view of US exceptionalism that drove US assets to outperform in the last decades, triggering a flight away from the US and into the safety of gold.
Consequently, gold prices rose by more than 30% since the start of the year and the gold to silver ration widened to its highest since 1994, with the exception of the pandemic.
Source: Trading Economics
