According to Huitong Finance, global gold prices rose 1% on Friday due to a stronger dollar and profit-taking, but geopolitical and economic uncertainties linger, coupled with expectations of a rate cut by the Federal Reserve, gold prices rose for the third consecutive week. Traditionally, gold is seen as a safe investment in times of geopolitical and economic uncertainty, and usually performs strongly in a low-interest rate environment. Gold has hit 16 all-time highs this year, reaching an all-time high of $3,057.28 an ounce on Thursday.
Marex analyst Edward Meir said, "The market is taking a breather. There is some profit-taking at the current price and the dollar is stronger today.
U.S. President Trump still intends to implement new equivalent tariff rates on April 2. The Federal Reserve kept its benchmark interest rate unchanged on Wednesday as expected, but said it would make two 25 basis point rate cuts before the end of the year.
Traders expect the Federal Reserve to cut interest rates by 71 basis points this year, at least two 25 basis point cuts each, with the July rate cut fully priced in, according to data from the London Stock Exchange Group (LSEG).
Fed Williams said on Friday that the Fed's current monetary policy is just right given the performance of the economy in an environment of high uncertainty in the outlook.
Williams said in a speech at an event in the Bahamas that "there is some uncertainty in monetary policy." "Given the solid labor market and inflation is still slightly above our 2% The current moderately restrictive monetary policy stance is entirely appropriate for the Fed’s dual goals,” and the current monetary policy settings also enable the Fed to “adjust to changing conditions that affect the achievement of its dual goals
Federal Reserve policymakers on Wednesday kept the benchmark interest rate target range unchanged at 4.25%-4.50%, and hinted that they still expect to cut interest rates later this year
At the same time, Fed policymakers acknowledged that there is considerable uncertainty in the outlook amid the Trump administration’s policy changes, which they expect will push up inflation at least in the short term
Williams did not reveal his expectations for Fed policy this year in his formal speech. He pointed out that the economy has started well in 2025 and said that although the process of inflation retreating has been bumpy, the job market is more balanced and is not a driver of price pressures
Looking ahead, Williams said he believes that the slowdown in economic growth is partly due to the decline in immigration. But he added that "it is difficult to know exactly how the economy will develop. Uncertainty is high, and multiple scenarios are possible, with the ultimate outcome depending on fiscal and trade policies as well as geopolitical and other developments," he said, adding that "it is difficult to determine the probability of these scenarios at this time
Williams also talked about recent data that tend to point to a significant rise in inflation expectations in the short term, while other data also show that public confidence has declined as the Trump administration has significantly streamlined the federal government and cut spending
Williams said that "there is no sign that inflation expectations are getting out of control compared to pre-pandemic levels," while noting that "over the past two months, we have seen clear signs of a general rise in short-term inflation expectations," but that this upward trend has not extended to long-term inflation expectations. "This analysis suggests that households expect the inflation shock to taper off over the next few years
Williams also commented on the Federal Reserve's announcement at this week's policy meeting that it would slow the pace of its balance sheet reduction to negligible levels. "This week's decision to further slow the pace of balance sheet reduction is the natural next step in that process," he said. The process has reduced the size of the Fed's balance sheet by more than $2 trillion
Williams said on Friday that it is not easy to assess the impact of the Trump administration's trade policies on the economy. Williams said in response to questions after a speech in the Bahamas that when it comes to understanding the impact of factors such as tariffs on inflation and growth, "it really depends on the sequence and nature of these policy changes. In addition, the geopolitical situation in the Middle East, which has pushed gold prices to record highs this week, may continue to help gold prices rise. According to CCTV, Israel announced a sea, land and air attack on Hamas in Gaza to force the other side to release the remaining hostages. This move means that Israel has abandoned the two-month ceasefire agreement and launched a full-scale air and ground offensive against Palestinian militant organizations. According to CCTV, on March 21, local time, the United States will deploy a second aircraft carrier to the Middle East to strengthen its attack on the Houthi armed forces. This will be the second time in the past six months that the United States has sent two aircraft carrier strike groups in the Middle East. The situation in the Middle East may continue to push gold prices higher next week and increase gold price volatility. Overall, the price of gold has been driven by geopolitical tensions recently. If the situation in the Middle East escalates over the weekend, and all parties are responding to Trump's tariffs in early April, and there is a possibility of renegotiation of the mining agreement with Ukraine, market uncertainty will increase, and the price of gold is expected to hit around 3,100, setting a new record high.
Marex analyst Edward Meir said, "The market is taking a breather. There is some profit-taking at the current price and the dollar is stronger today.
U.S. President Trump still intends to implement new equivalent tariff rates on April 2. The Federal Reserve kept its benchmark interest rate unchanged on Wednesday as expected, but said it would make two 25 basis point rate cuts before the end of the year.
Traders expect the Federal Reserve to cut interest rates by 71 basis points this year, at least two 25 basis point cuts each, with the July rate cut fully priced in, according to data from the London Stock Exchange Group (LSEG).
Fed Williams said on Friday that the Fed's current monetary policy is just right given the performance of the economy in an environment of high uncertainty in the outlook.
Williams said in a speech at an event in the Bahamas that "there is some uncertainty in monetary policy." "Given the solid labor market and inflation is still slightly above our 2% The current moderately restrictive monetary policy stance is entirely appropriate for the Fed’s dual goals,” and the current monetary policy settings also enable the Fed to “adjust to changing conditions that affect the achievement of its dual goals
Federal Reserve policymakers on Wednesday kept the benchmark interest rate target range unchanged at 4.25%-4.50%, and hinted that they still expect to cut interest rates later this year
At the same time, Fed policymakers acknowledged that there is considerable uncertainty in the outlook amid the Trump administration’s policy changes, which they expect will push up inflation at least in the short term
Williams did not reveal his expectations for Fed policy this year in his formal speech. He pointed out that the economy has started well in 2025 and said that although the process of inflation retreating has been bumpy, the job market is more balanced and is not a driver of price pressures
Looking ahead, Williams said he believes that the slowdown in economic growth is partly due to the decline in immigration. But he added that "it is difficult to know exactly how the economy will develop. Uncertainty is high, and multiple scenarios are possible, with the ultimate outcome depending on fiscal and trade policies as well as geopolitical and other developments," he said, adding that "it is difficult to determine the probability of these scenarios at this time
Williams also talked about recent data that tend to point to a significant rise in inflation expectations in the short term, while other data also show that public confidence has declined as the Trump administration has significantly streamlined the federal government and cut spending
Williams said that "there is no sign that inflation expectations are getting out of control compared to pre-pandemic levels," while noting that "over the past two months, we have seen clear signs of a general rise in short-term inflation expectations," but that this upward trend has not extended to long-term inflation expectations. "This analysis suggests that households expect the inflation shock to taper off over the next few years
Williams also commented on the Federal Reserve's announcement at this week's policy meeting that it would slow the pace of its balance sheet reduction to negligible levels. "This week's decision to further slow the pace of balance sheet reduction is the natural next step in that process," he said. The process has reduced the size of the Fed's balance sheet by more than $2 trillion
Williams said on Friday that it is not easy to assess the impact of the Trump administration's trade policies on the economy. Williams said in response to questions after a speech in the Bahamas that when it comes to understanding the impact of factors such as tariffs on inflation and growth, "it really depends on the sequence and nature of these policy changes. In addition, the geopolitical situation in the Middle East, which has pushed gold prices to record highs this week, may continue to help gold prices rise. According to CCTV, Israel announced a sea, land and air attack on Hamas in Gaza to force the other side to release the remaining hostages. This move means that Israel has abandoned the two-month ceasefire agreement and launched a full-scale air and ground offensive against Palestinian militant organizations. According to CCTV, on March 21, local time, the United States will deploy a second aircraft carrier to the Middle East to strengthen its attack on the Houthi armed forces. This will be the second time in the past six months that the United States has sent two aircraft carrier strike groups in the Middle East. The situation in the Middle East may continue to push gold prices higher next week and increase gold price volatility. Overall, the price of gold has been driven by geopolitical tensions recently. If the situation in the Middle East escalates over the weekend, and all parties are responding to Trump's tariffs in early April, and there is a possibility of renegotiation of the mining agreement with Ukraine, market uncertainty will increase, and the price of gold is expected to hit around 3,100, setting a new record high.