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Gold prices blew the horn of a hasty retreat from their recently achieved historical highs. April futures for the yellow metal have restored an offensive line below $2900 per troy ounce last Friday, which lies slightly south of the record peak value at $2968.50. U.S.-Russia talks on potential Ukraine peace deal make the risk-off mood quieter these days. Yet, one may hardly expect a quick reversal from an overall bullish trend in golden assets. Uncertainty over global trade issues is still an important source of worries for conservative investors into the bonds denominated both in the U.S. Dollars and Euros. Gold cannot be a direct rival to high-yielding stock instruments or crypto transactions. When it comes to Gold prices, we should rather take into account a potential decrease in guaranteed income that can be expected from public bonds at lower interest rates. The further dovish policy moves by central banks may be postponed but they are still just around the corner.

Federal Reserve's governor Christopher Waller said on February 17 that the new White House administration's new tariffs could have only a "modest impact" on inflationary pressures, so that the central bank is going to "look through these effects" when setting the monetary course. Trump's tariff barriers should not stop the Fed from acting "if it is otherwise appropriate", just as Russia's invasion of Ukraine in 2022 or the collapse of Silicon Valley Bank in 2023, as he cited as two bright examples of things which did not prevent the U.S. central bankers from changing the interest rates environment. Even as those effects of tariffs could be "larger than I anticipate", he added, other policies under discussion could have "positive supply effects" to put downward pressure on sticky inflation. He could presumably imply tax cuts and the role of protectionism in boosting domestic production.

Christopher Waller, who was actually appointed to the Fed by Donald Trump in his first presidential term, concluded with the sentence that policy should be on hold "until inflation is falling again", but this should not "paralyze" interest rate moves down, as February's disappointing rise in the U.S. CPI (consumer price Index) reflected seasonal data adjustment and "not rising price pressures". If 2025 would play out like 2024, then rate cuts would follow "at some point this year". FedWatch tool shows broad expectation for the next rate cut move to take place in June or July, even though the Fed is expected to hold its interest rates on pause, within the current range of 4.25% to 4.50%, after its nearest meeting in March. These are the clear fundamentals why Gold prices have stopped near the round figure of $3,000/oz, but also why the current pullbacks may be more of a temporary phenomenon.

The width of this stalling price range is unlikely to exceed $200/oz. Besides, the next and higher goals for Gold are already visible. As an example, the banking group of UBS freshly updated its Gold prices projections by mentioning their new target of over $3,200 and stabilization at "elevated levels" in the coming years. UBS strategists cited "deep-rooted" bullish sentiment when "so much has already happened and it is only February", based on "underinvestment" as well as strong official sector demand, with record-high prices being detected "in just over 6 weeks since the start of the year". After missing some Gold-buying opportunities in 2024, many investors may use a "carpe diem" approach (of making the most of the present moment and giving little thought to the future) to seize on minor market corrections more promptly, suggesting liquidity issues with sensitivity to increases in physical demand.