Gold prices slipped over 1% on Monday after briefly reaching a new record high, as positive developments surrounding U.S. President Donald Trump’s tariff policies boosted market risk appetite.
By 10:30 a.m. ET, spot gold had fallen by 1.1% to $3,201.63 per ounce, retreating from its peak of $3,245.36 set late Sunday evening. Meanwhile, U.S. gold futures dropped 0.8%, trading at $3,217.20 per ounce.
The decline in gold prices came as market sentiment improved following Washington’s announcement that it would exempt certain consumer electronics, such as smartphones and computers, from President Trump’s reciprocal tariffs. This news eased some of the fears surrounding the U.S.-China trade war, which had previously driven investors toward safe-haven assets like gold.
“Some risk-on trading here got us off the recent highs, but still, the environment is pretty good for gold,” said Bart Melek, head of commodity strategies at TD Securities, in a note to Reuters.
Despite the retreat in gold prices, the U.S. dollar continued to struggle, remaining near a three-year low against other currencies, which provided ongoing support for gold. The weaker dollar typically makes gold more affordable for holders of other currencies.
Peter Grant, vice president and senior metals strategist at Zaner Metals, noted, “Perhaps some relief on the tariff front, with the exemption of some electronics, may be taking some of the safe-haven bid out. However, ongoing uncertainty about trade and tariffs, weakness in the dollar, and softer yields tend to be supportive for gold.”
The U.S.-China trade war has caused significant turbulence in global markets, pushing investors toward the perceived safety of gold, which is traditionally considered a hedge against geopolitical and economic instability.
While Trump’s tariff reprieve has helped lift some of the pressure on the market, the uncertainty surrounding his upcoming announcement on tariffs for imported semiconductors continues to keep investors on edge. This uncertainty leaves room for further potential upside in gold.
Gold has surged by more than 20% so far in 2025, making it one of the top-performing assets of the year. The rally has been fueled by growing concerns over a potential recession, as well as an increasing reluctance to invest in U.S. assets such as stocks, bonds, and the dollar.
Goldman Sachs remains one of the most optimistic major banks regarding gold’s future. On Friday, the bank raised its year-end gold price forecast to $3,700 per ounce, citing stronger-than-expected demand from central banks and heightened recession risks, which have bolstered inflows into gold exchange-traded funds (ETFs).
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