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- Renewed conflict between India and Pakistan boosts haven flows into Gold, weighs on Wall Street sentiment.
- Trump signals flexibility on tariffs; markets ignore upbeat tone from US Treasury Secretary.
- Traders await FOMC rate decision and Powell’s press conference for clues on policy path.
Gold experienced a significant rally, reaching a two-week high on Tuesday, as Chinese markets reopened after an extended holiday and anxieties surrounding U.S. trade policies persisted. The resumption of trading in China brought renewed focus on global economic uncertainties. Furthermore, escalating geopolitical tensions, particularly the emerging conflict between Pakistan and India, further propelled the demand for the precious metal as a safe-haven asset. As of the latest update, XAU/USD is trading at $3,400, marking a substantial increase of over 2.70%. This price surge reflects the heightened risk aversion prevailing in the market.
Wall Street concluded Tuesday’s trading session with losses, as market participants carefully assessed U.S. President Trump’s recent statements concerning trade policies. The President indicated that he would personally determine tariff levels and expressed a willingness to be flexible in setting these duties. This assertion of control over trade policy introduced an element of uncertainty into the market, contributing to investor unease. Investors largely disregarded earlier optimistic remarks from U.S. Treasury Secretary Scott Bessent regarding potential trade agreements with 17 countries, suggesting a lack of confidence in the near-term prospects for trade resolution. The Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all registered declines, reflecting the overall negative sentiment.
Bloomberg News reported that Indian forces conducted strikes against alleged terrorist camps within Pakistan, clarifying that no military installations were targeted. According to a statement from the Indian government, “It conducted military strikes against “terrorist camps” in Pakistan, an expected move after it pledged retaliation for a militant attack last month in Kashmir that killed dozens of tourists.” This action followed a previous pledge by the Indian government to retaliate for a militant attack in Kashmir the previous month, which resulted in the deaths of numerous tourists. The geopolitical ramifications of this event are being closely monitored by investors, as further escalation could have significant implications for regional stability and global markets. Market analysts are also closely watching for any reactions from Pakistan and the international community, as these responses could further influence market sentiment.
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