As traders sell gold to raise funds, the continued selling pressure on the US stock market also puts pressure on gold. Although gold prices may still decline, an analyst suggests that gold remains an important safe haven asset.

Last Friday, Suki Cooper, a precious metals analyst at Standard Chartered Bank, released her latest outlook for gold, predicting that the average gold price in the second quarter will be around $3300 per ounce, higher than the previous forecast of $2900 per ounce.

She said, "In the safe haven environment after the United States announced stricter tariffs than expected, gold volatility has risen, sandwiched between safe haven demand and the need to meet margin calls as a liquid asset

Although the gold price once fell below $3000 per ounce, its performance is still significantly better than the S&P 500 index and other commodities such as copper, oil, and silver.

After Trump announced tariffs, gold prices fell 6% from last week's historic high. Meanwhile, the S&P 500 index closed at 4987 points, down 12% from last week.

Cooper said in the report, "It is not uncommon for gold to be sold off during safe haven events and then rebound, but the macro background is still favorable for gold, and the gold price trend is relatively resilient

Looking ahead, Cooper stated that in the current environment, as the risk of recession continues to rise, gold remains an attractive investment. Meanwhile, economists point out that Trump's global import tariffs may push up inflation and create a stagflation environment.

Cooper said, "The overall recessionary environment is favorable for gold. On an annual basis, gold has risen by an average of 15% during the past seven economic recessions in the United States. There is limited available data during stagflation, but gold rose by 61% from November 1973 to March 1975, fell by 12% from January to July 1980, and rose by 5% from July 1981 to November 1982

Cooper said she is bullish on gold because she expects weak economic growth to prompt the Federal Reserve to cut interest rates even as inflation concerns continue to intensify. But she also pointed out that the Federal Reserve's easing may be lower than expected, and the market currently expects to cut interest rates five times this year.

She said, "Our foreign exchange strategists believe that the Federal Reserve does not want to significantly cut interest rates, but if the hard data becomes bad enough, even if tariffs lead to increased inflation risks, the Fed will do so. They expect the Fed to cut interest rates once each in the second and third quarters, and currently the federal funds futures market expects nearly four cuts of 25 basis points each

Last Friday, amidst market turbulence, Federal Reserve Chairman Powell reiterated the Fed's neutral stance.

Powell said, "We will continue to closely monitor the upcoming data, changing outlook, and risk balance. Before considering any adjustments to our policy stance, we have ample conditions to wait for clearer information. It is too early to say the appropriate path for monetary policy.