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Gold price ( XAU/USD) climbs to near $4,775 during the early Asian trading hours on Wednesday. The precious metal extends the rally and is poised for another record high amid a time of political and economic uncertainty. The speech by US President Donald Trump at the World Economic Forum in Davos, Switzerland, will be in the spotlight later on Wednesday. 

Traders continue to pile into safe-haven assets amid tensions between the US and Europe over Greenland. US President Donald Trump over the weekend threatened to impose tariffs on eight European nations that oppose his plans to take control of Greenland. 

The BBC reported on Wednesday that the European Parliament is planning to suspend approval of the US trade deal agreed in July, according to sources close to its international trade committee. The suspension is scheduled to be announced in Strasbourg, France, on Wednesday. Escalation in tensions between the US and Europe could boost traditional safe-haven assets such as Gold in the near term. 

Traders push back their bets that the US Federal Reserve (Fed) would cut interest rates later this month after signs of an improving US labour market. Traders are now pricing in the next rate reduction coming in June, the month after Fed Chair Jerome Powell’s tenure ends, with another easing to follow in the fourth quarter. The view that the US central bank can keep interest rates higher for longer generally underpins the US Dollar (USD) and weighs on the non-interest-bearing assets like Gold.

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