Gold (XAU/USD) has eased to around $2,925 during Asian trading hours on Monday, retreating from its record high. This pullback is attributed to profit-taking after reaching an all-time peak of $2,954 last week. Despite the short-term decline, concerns over U.S. President Donald Trump’s tariff policies and broader global uncertainties may limit further downside for the precious metal.
“The movement is just a typical response to new all-time highs followed by profit-taking,” said Alex Ebkarian, COO at Allegiance Gold. “However, the fundamentals for gold remain strong.”
Investor demand for gold has been buoyed by global economic uncertainties and political instability. Trump recently announced that he would introduce new tariffs in the coming month, extending his previous plans to include duties on lumber, forest products, imported cars, semiconductors, and pharmaceuticals.
“Trade tensions continue to fuel concerns over inflation and economic growth, driving demand for gold as a safe-haven asset,” noted Peter Grant, VP and senior metals strategist at Zaner Metals.
On the other hand, minutes from the Federal Reserve’s January meeting, released last week, indicated that Trump’s tariff proposals had exacerbated inflation concerns. This has reinforced the Fed’s decision to hold off on further rate cuts, which could strengthen the U.S. dollar and exert downward pressure on the USD-denominated gold price in the near term.
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