Stagflation worries push Gold higher – Commerzbank

The price of Gold continues to rush from record high to record high. It has now broken through the $3,100 per troy ounce mark, Commerzbank's commodity analyst Thu Lan Nguyen notes. 

Risk of a setback looms over Gold

"The Gold price rose by 19% in the past quarter, which was the strongest quarterly increase since 1986, albeit at a significantly lower price level at the time. The main driver continues to be the high level of uncertainty surrounding the Trump administration's US tariff threats." 

"It remains unclear how broad the reciprocal tariffs announced for 2 April will be, as well as the counter-tariffs that are likely to follow, particularly from Europe and China. The market appears to be particularly fearful of the consequences for the US economy and is therefore increasingly betting on interest rate cuts by the US Federal Reserve." 

"As the tariffs also have an inflationary effect, the (expected) US real interest rate is being depressed, which in turn is having a positive impact on the Gold price. In contrast, our economists do not expect the Fed to resume interest rate cuts quickly due to the inflation risks, which is why we continue to see the risk of a setback for Gold."