Investing.com-- Gold prices rose slightly to a record high in Asian trade on Wednesday, as safe haven demand remained underpinned by renewed geopolitical ructions in the Middle East and concerns over trade tariffs.
Investors also remained largely risk-averse before the conclusion of a Federal Reserve meeting later on Wednesday, which is expected to offer more insight into the U.S. economy.
The yellow metal rose sharply over the past week as risk appetite was undermined by U.S. President Donald Trump continuing to threaten higher trade tariffs, while fears of a U.S. recession grew. The dollar fell on this notion, lending gold more strength.
Spot gold rose 0.1% to a record high of $3,039.0 an ounce, while gold futures expiring in May rose 0.1% to a peak of $3,046.12 an ounce.
A Bank of Japan meeting yielded few changes on Wednesday, while the Bank of England is expected to keep rates unchanged later in the day.
Gold hit a record high on Tuesday after the Israel-Hamas ceasefire collapsed, pointing to heightened tensions in the Middle East. Middling progress in Russia-Ukraine ceasefire discussions also aided haven demand.
Gold buoyant as Fed rate decision looms
The Fed is widely expected to keep interest rates unchanged at 4.5% after the conclusion of a meeting later on Wednesday, amid persistent uncertainty over the U.S. economy under Trump.
Officials have repeatedly flagged uncertainty over the near-term economic outlook as Trump enacts his agenda, with limited scope for any further reductions in interest rates in the near-term.
The Fed is also set to release its updated summary of economic projections, offering more insight into the central bank’s expectations for the U.S. economy under Trump.
Trump’s trade tariffs- especially his flip-flopping on measures against Canada and Mexico- sparked increased uncertainty over the U.S. economic outlook. The U.S. President has warned that he will impose even higher tariffs in early-April.
Markets fear that higher tariffs will disrupt global trade and underpin U.S. inflation, hampering local economic growth.
Other precious metals eased slightly on Wednesday, cooling after a strong run-up in recent sessions. Platinum futures fell 0.4% to $1,016.90 an ounce, while silver futures fell 0.5% to $34.55 an ounce.
Copper upbeat with China stimulus in focus
Among industrial metals, copper prices steadied after a series of strong gains in recent sessions, amid growing optimism over top importer China.
Benchmark copper futures on the London Metal Exchange fell 0.1% to $9,901.85 a ton, while May copper futures rose 0.3% to $5.0213 a pound.
China recently outlined more fiscal measures aimed at boosting private spending and supporting the economy, sparking increased optimism over Beijing’s growth prospects in 2025. Improving economic conditions in the country are expected to bolster its appetite for copper.
Trump also plans to impose tariffs on copper, which could severely limit physical U.S. supplies in the near-term.