Gold prices remained stable on Monday, holding close to recent peaks as demand for safe-haven assets surged due to growing concerns over a U.S. economic slowdown and potential trade tariffs.
The yellow metal saw a series of record highs last week, driven by sustained buying following U.S. President Donald Trump’s threat of additional trade tariffs. The rising fear of a U.S. economic downturn also bolstered gold’s appeal, particularly after weak data on Friday showed a decline in the U.S. purchasing managers index and consumer sentiment.
A weakening dollar, fueled by expectations that a slower economy would prompt further interest rate cuts, provided additional support for gold and other metals.
By 00:37 ET (05:37 GMT), spot gold had increased by 0.1% to $2,940.18 an ounce, while April gold futures remained unchanged at $2,952.97 an ounce.
Economic Concerns and Tariff Fears Drive Gold Demand
Spot gold remained near its recent high of $2,954.97 an ounce, driven by heightened demand for safe-haven assets as financial markets faced a downturn. Asian stocks dropped on Monday, following significant losses on Wall Street on Friday.
Risk aversion intensified following disappointing U.S. economic data. The softer-than-expected U.S. services PMI, combined with weak consumer sentiment, raised concerns that private spending in the world’s largest economy was slowing. This came just a week after January’s retail sales report also missed expectations, further fueling worries about a potential slowdown.
These economic concerns, along with the threat of more trade tariffs from Trump, underpinned gold demand. The U.S. president’s remarks on additional tariffs targeted at key sectors and reciprocal tariffs from major trading partners contributed to the metal’s appeal as a hedge against economic volatility.
Dollar Weakness Boosts Broader Metal Prices
The dollar weakened on Monday, driven by expectations of future interest rate cuts aimed at stimulating the U.S. economy. The dollar index fell 0.3% to its lowest level in two and a half months during Asian trading. Meanwhile, Treasury yields also recorded sharp losses last week, which further supported gold and other precious metals.
Platinum futures gained 0.6% to $994.00 an ounce, while silver futures remained unchanged at $32.998 an ounce. Gold has outperformed the broader precious metal sector so far in 2025.
Among industrial metals, copper futures on the London Metal Exchange slipped 0.2% to $9,535.95 per ton, while March copper futures held steady at $4.6170 per pound. Copper has seen strong gains over the past month, driven by growing optimism surrounding China, the world’s top importer of the metal.
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