Gold prices surged to a new record on Wednesday, briefly surpassing $3,350 per troy ounce, before easing below $3,300 as investors took profits and turned their attention to a pivotal speech from Federal Reserve Chair Jerome Powell. The pullback came just hours before Powell cautioned that tariffs imposed by former President Donald Trump could fuel inflation and complicate monetary policy decisions.

As of 6:26 GMT, June gold futures on the New York Comex exchange climbed by $113.39, reaching an unprecedented $3,353.79 per troy ounce, before retreating during the US session. The sharp rally was largely driven by safe-haven demand amid intensifying global trade tensions and expectations of looser monetary policy.

Earlier in the day, analysts noted that the market was beginning to show signs of being overbought, with the Relative Strength Index (RSI) on both daily and 4-hour charts indicating stretched conditions. Profit-taking by traders, combined with caution ahead of Powell's speech, likely contributed to the temporary decline. Still, gold remains underpinned by persistent geopolitical uncertainty and expectations of rate cuts in 2025.

"Tariffs are highly likely to generate at least a temporary rise in inflation," Powell said in Chicago. He also warned the inflationary effects "could also be more persistent," potentially putting the Fed's twin objectives—price stability and full employment—in conflict.

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"Policymakers could find themselves in the challenging scenario in which our dual-mandate goals are in tension."

Investors are betting that economic disruptions from Trump's on-again, off-again tariff strategy—including a recent 90-day delay on certain levies and China's 125% counter-tariffs—could weaken growth enough to justify a 1% rate cut by the Fed in 2025. These expectations have pushed the US dollar to its lowest level since April 2022, further supporting gold's upward momentum.

Though data out of China showed better-than-expected economic growth at 5.4% in Q1, investor sentiment remained cautious amid rising trade frictions. Chinese President Xi Jinping, meanwhile, is touring Asian nations to promote China as a stabilizing force in global trade—a message directly countering Washington's increasingly protectionist posture.

Read more: US no longer seen as safe haven by global investors: Axios

From a technical perspective, analysts suggest that short-term support for gold lies in the $3,245–$3,230 range, with deeper pullbacks potentially finding a floor near $3,200. Despite the near-term volatility, many traders still view gold's retreat as a buying opportunity, expecting the metal's uptrend to resume as macroeconomic conditions evolve.