Gold: Tariff Conflict Drives Safe-Haven Buying - Commerzbank

Commerzbank analyst Carsten Fritsch noted in the latest report that gold has surged to a three-month high near $4,700 per ounce, driven by safe-haven buying as US-Canada tariff tensions escalate and concerns over the US debt outlook intensify.

**Tariff Conflict and Debt Concerns Resonate**

Fritsch said that a weaker US dollar and rising safe-haven demand have jointly pushed gold through key levels. The bank's previous report mentioned gold breaking above $4,500 per troy ounce, while the latest assessment shows prices have further approached $4,700. Meanwhile, silver and platinum have also risen, reflecting growing safe-haven allocation demand across the precious metals sector as a whole.

**Divergence Between Institutional Forecasts and Market Pricing**

Notably, Commerzbank's internal medium-term view on gold is not unilaterally bullish. According to earlier remarks by Thu Lan Nguyen, head of the bank's commodity analysis team, market pricing for Fed rate hikes may be overly aggressive, and the bank's baseline view remains that the Fed will hold rates steady through year-end. This suggests that while gold is supported by short-term safe-haven sentiment, the sustainability of further upside still needs monitoring if subsequent inflation data does not significantly exceed expectations.

**Tug-of-War Between Short-Term Momentum and Medium-Term Logic**

On the chart, gold has gained short-term upside momentum catalyzed by the dual drivers of tariff conflict and US debt concerns, but Commerzbank also cautions that as long as geopolitical tensions persist, the scope for gold to earn excess returns from safe-haven demand may be limited. Market reports indicate that some institutions have revised their year-end gold forecasts down from $4,800 to around $4,500, highlighting a clear divergence between medium-to-long-term expectations and short-term price movements.