The price of gold climbed to a fresh record high near $3,375 during the early Asian trading session on Monday, buoyed by renewed safe-haven demand following a period of profit-taking over the long weekend.
Heightened uncertainty surrounding U.S. President Donald Trump’s tariff policies and persistent geopolitical tensions have continued to support the precious metal. Investor appetite for gold has surged amid concerns over the economic impact of tariffs, pushing prices more than 25% higher since January.
“The case for adding gold allocations has become more compelling than ever in this environment of escalating tariff uncertainty, weaker growth, higher inflation, geopolitical risks, and diversification away from U.S. assets and the U.S. dollar,” analysts at UBS said.
In addition to private sector demand, central banks have also stepped up gold purchases. China, the world’s largest gold consumer, increased its gold reserves for a fifth consecutive month, reinforcing its position as a major buyer of the metal amid mounting global trade and geopolitical tensions.
However, a potentially hawkish shift in U.S. monetary policy could temper gold’s rally. Federal Reserve Chair Jerome Powell struck a more hawkish tone last week, reducing the likelihood of a rate cut in June. Meanwhile, San Francisco Fed President Mary Daly emphasized on Friday that while some sectors are showing signs of slowing, the overall U.S. economy remains in a strong position. A stronger U.S. dollar, in turn, could weigh on dollar-denominated commodities like gold.
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