Amidst a period of financial uncertainty, the price of gold has witnessed a modest recovery, regaining ground above $2,900 per ounce. Despite lingering concerns over the US economic outlook, the recent global sell-off that unsettled Wall Street appears to be losing steam. Investors remain cautious as they assess the potential impact of policy changes on market stability. Gold, traditionally seen as a safe-haven asset, experienced a slight dip earlier in the week but quickly rebounded, driven by various factors including central bank purchases and speculation about future interest rate cuts.

The rise in gold prices this year has been notable, with an 11% increase fueled by fears surrounding economic disruptions. The Trump administration's trade policies have raised concerns about a possible recession, leading investors to seek refuge in precious metals. While lower interest rates tend to support non-yielding assets like gold, the surge in prices has also affected physical demand in key Asian markets. However, investment flows into gold-backed exchange-traded funds (ETFs) have remained robust, reaching their highest levels since late 2023.

In spite of tepid demand in major economies such as India and China, analysts predict that gold prices will continue to reach new heights this year. The steady inflows into ETFs are expected to offset the decline in physical purchases. Analysts from Standard Chartered Plc suggest that while gold may lack a strong foundation in the physical market, its overall trajectory remains positive, supported by ongoing investor interest.

As the global economy navigates through uncertain times, the resilience of gold as a safe-haven asset continues to attract attention. With the Bloomberg Dollar Spot Index showing a slight decline, other precious metals like silver, palladium, and platinum have also seen gains. The performance of gold in the coming months will likely depend on how well it balances between physical demand and investment flows, reflecting broader economic trends and policy shifts.