Gold prices remained stable on Monday, holding steady below recent record highs as demand for the precious metal was supported by ongoing uncertainty surrounding U.S. trade tariffs and interest rate expectations.
In the past two weeks, gold had surged to new highs, fueled by rising risk aversion as U.S. President Donald Trump’s trade actions triggered concerns. However, the recent postponement of some tariffs by Trump led to a pullback in gold prices from their peaks.
Additionally, safe haven demand was somewhat tempered by speculation surrounding the possibility of a peace treaty between Russia and Ukraine, with Trump expressing a desire for peace between the two nations. Diplomatic talks are expected to begin in the coming weeks.
By 00:35 ET (05:35 GMT), spot gold had gained 0.6%, reaching $2,901.21 per ounce, while April gold futures rose by 0.3% to $2,910.70 per ounce.
Gold Remains Close to Record Highs
Despite recent fluctuations, gold prices remained near the record high of $2,943.25 per ounce reached last week. The metal’s rise was largely driven by increased demand for safe haven assets after Trump imposed a 25% tariff on steel and aluminum imports. He also outlined plans for reciprocal tariffs on major U.S. trading partners, although these are not expected to take effect until April.
Over the weekend, media reports suggested that the European Union was planning to block imports of U.S. soybeans and other food products that diverged from domestic standards. Trump dismissed these reports, reaffirming his intention to proceed with reciprocal tariffs.
The imposition of metal tariffs has sparked reactions from other countries, with Beijing retaliating against a 10% duty imposed earlier this month. These tensions have further fueled demand for gold as markets brace for a potential trade war between the U.S. and China.
Dollar Weakness Boosts Precious Metals
A weaker U.S. dollar, which dropped to a two-month low on Monday, provided additional support for gold and other metals, particularly as recent U.S. economic data showed signs of softening.
January retail sales data, released last Friday, came in weaker than expected, raising concerns that consumer spending— a key driver of inflation— may be slowing. This follows stronger-than-anticipated consumer and producer inflation reports for January, though some components, which influence the Personal Consumption Expenditures (PCE) price index, showed signs of cooling.
These economic reports have led to speculation that the Federal Reserve might be compelled to lower interest rates sooner than expected, further weighing on the dollar and benefiting metal prices. Despite this, gold prices experienced a slight dip on Monday.
In other precious metals, platinum futures fell 0.2% to $1,016.80 per ounce, while silver futures declined 0.2% to $32.785 per ounce.
Industrial Metals Experience Modest Declines
Among industrial metals, copper prices experienced a pullback after a strong performance last week. Benchmark copper futures on the London Metal Exchange eased to $9,468.45 per ton, while March copper futures dropped to $4.6640 per pound.
As global trade tensions persist and the outlook for the U.S. economy remains uncertain, metals markets are likely to continue facing volatility in the coming weeks.
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