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GOLD GAINS COULD CONTINUE LONGER TERM

While higher metals prices can potentially dent company profit margins or lead to higher costs for consumers, they may also mean an investment opportunity in such areas as the gold market XAU=, Adam Turnquist, chief technical strategist at LPL Financial, writes in a note out on Tuesday.

Metals prices have been gaining in recent weeks as investors have been pricing in tariff risks amid announcements from the Trump administration. Trump has imposed tariffs on steel and aluminum imports.

Turnquist writes that even though gold prices surged last year, momentum in the precious metal has continued in 2025 "as tariff fears spurred safe haven flows and demand for gold exchange traded funds (ETFs)."

Turnquist notes that also helping gold has been steady demand from global central banks that are diversifying reserve holdings away from the dollar.

"Adding gold and reducing dollars has been a growing theme among global central banks," he writes.

On a technical basis, gold hit record highs earlier this month after surpassing resistance off the October highs, he notes.

While on a short-term basis, prices are historically overbought and could be due for a pullback, longer-term indicators for gold are positive, he says, noting that bullion still appears cheap when comparing it to the broader stock market.

"While we are not advocating investors rotate from equity markets to gold, we do reiterate our positive view on precious metals, a view we have held since last spring," he says.

Meanwhile, the SPDR gold shares ETF GLD.P is up 1.6% on Tuesday, and up 11.7% year-to-date.

(Caroline Valetkevitch)

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