It has been proven that the pullback in gold prices last week was short-lived, as the sharp decline in the US stock market drove gold to regain safe haven demand.

The decline of the S&P 500 index began on Monday afternoon, after President Trump announced that his 25% tariff on imported goods from Canada and Mexico would take effect at midnight on Tuesday. At the same time, Trump has also extended tariffs on goods from major Asian countries, pushing the United States into a global trade war.

The Dow Jones Industrial Average fell 104 points on Monday and continued to decline on Tuesday. The S&P 500 index fell below the key support level of 5800 points. Meanwhile, the gold price has steadily rebounded above $2900 per ounce.

The tariff concerns completely wiped out the stock market's gains after the election. Meanwhile, Ole Hansen, head of commodity strategy at Shengbao Bank, stated that there is still room for gold prices to rise after a slight correction. He said the goal of $3000 has come back.

Hansen said in his latest precious metals report, "The outlook for gold remains positive, especially considering the limited depth of the recent correction, which indicates strong demand despite selling pressure from technically focused traders. In addition to diversification and safe haven demand, gold may continue to benefit from central bank buying due to ongoing concerns about fiscal debt

Hansen stated that in addition to the safe haven appeal of gold supported by geopolitical uncertainty, the continuous weakening of the US dollar has benefited gold as it tests the key support level of 106 points in the US dollar index.

At the same time, Hansen pointed out that the slowdown in economic activity is raising expectations that the Federal Reserve will be forced to cut interest rates this year, even if inflation remains high.

He said, "Although we are acutely aware that there is nothing that is going up in a straight line, we are maintaining our recently raised target of $3300

As for the potential of gold, Hansen pointed out that despite unstable speculative interest remaining low, investment demand for gold exchange traded products has significantly increased in the past few weeks.

He said, "Although the demand for gold ETFs has increased in the past month, the total holdings of 85.8 million ounces are still far below the recent peak of 107 million ounces in 2022.