A worker handles an Argor-Heraeus SA one kilogram gold bar at Solar Capital Gold Zrt. arranged in Budapest, Hungary, on Tuesday, March 22, 2022. Gold edged higher in Asian trading -- following its biggest weekly drop since June -- as investors weighed monetary policy tightening in the U.S. against the impact of the Russia-Ukraine war. Photographer: Akos Stiller/Bloomberg 
“Optimism about US interest rate cuts as more economic data supports the case for a Fed pivot is supporting gold,” Ewa Manthey, a commodities strategist at ING Bank NV, said on Tuesday. “Gold is poised to keep its positive momentum going amid the current global geopolitical and macroeconomic landscape, while central bank demand is expected to grow.”
On Monday, Fed Chair Jerome Powell said recent data had given policymakers greater confidence that inflation is heading down to the central bank’s 2% goal.
Traders have been adding bets there will be three cuts this year after Goldman Sachs Group Inc. said conditions were ripe for easing, with “a solid rationale” for officials to lower rates as soon as July.
Gold’s latest rally isn’t necessarily unexpected: in June, consultancy Metals Focus predicted a fresh record this year, while earlier this month Citigroup Inc. said its base case for gold in 2025 was $2,700-$3,000 an ounce.
Trump momentum
Trump’s candidacy gained momentum after a failed assassination attempt over the weekend and a judge dismissed a criminal case against him. The Dow Jones Industrial Average hit an all time high on Monday, while Trump Media & Technology Group Corp. and Conservative video-sharing platform Rumble Inc. both jumped.
A Trump presidency could have potentially positive and negative impacts on gold, said Giovanni Staunovo, a commodity analyst at UBS Group AG. It might lead to “tax cuts, supporting a shift to equities, and eventually limiting faster rate cuts,” he said.
On the other hand, tax cuts would impact US fiscal balances, potentially weakening the dollar’s status and pushing buyers toward safe-haven assets such as gold, he said.
Spot gold rose 0.8% to $2,442.65 an ounce by 2:40 p.m. in London. The Bloomberg Dollar Spot Index gained 0.2%, while US 10-year Treasury yields slipped. Silver advanced, while platinum and palladium fell.