On March 20, 2025, gold prices retreated after hitting a record high earlier on Thursday, but remained bullish as the Federal Reserve hinted at possible rate cuts amid ongoing geopolitical and economic uncertainties. Spot gold fell 0.3% due to profit-taking, priced at $3038.79 per ounce. Earlier, gold had reached $3057.21, setting a historical high.
Meanwhile, U.S. gold futures rose 0.1% to $3043.80 per ounce. Alex Ebkarian, COO of Allegiance Gold, pointed out that despite gold reaching new highs, speculators in the market are trying to profit from it. "Whenever gold hits a new high, it encounters some resistance," he said. "Currently, gold hasn't become a safe haven asset because technically, the economy hasn't entered a recession. However, an economic slowdown might bring more uncertainty, increasing the demand for safe-haven assets."
On Wednesday, Fed Chair Powell stated that the high import tariffs imposed by the Trump administration may slow U.S. economic growth and exacerbate inflation. Additionally, Trump criticized the Fed's decision to keep rates unchanged, even though the Fed expects to cut rates twice by the end of the year, by 25 basis points each, due to slowing economic growth and rising inflation.
According to data from the London Stock Exchange Group (LSEG), market participants anticipate the Fed to cut rates by 69 basis points this year, at least twice by 25 basis points each, with the likelihood of a rate cut in July fully factored in.
Citigroup analysts stated in a report that as the U.S. faces concerns of a hard landing or stagflation, it is expected that hedging and investment demand will significantly increase, driving gold prices up, with gold potentially reaching $3500 per ounce by the end of the year.
In other precious metals, spot silver fell 1.2% to $33.41 per ounce; platinum decreased 1.1% to $982.0; and palladium dropped 1.3% to $946.5.
