Gold prices slipped to their lowest level in over three weeks on Monday, as escalating fears of a global recession triggered a broader market sell-off. Investors appeared to offload bullion to cover losses elsewhere, amid intensifying concerns over a deepening global trade war.
As of 03:31 GMT, spot gold had declined 0.3% to $3,027.90 per ounce, after falling more than 1% earlier in the session—its weakest level since March 13. Meanwhile, U.S. gold futures inched up 0.4% to $3,047.50.
The decline followed a steep drop of more than 3% on Friday, when markets reeled from U.S. President Donald Trump’s announcement of unexpectedly aggressive tariff measures. The move reverberated across global financial markets, intensifying risk aversion.
Investors Liquidate Gold to Cover Losses
Gold, traditionally viewed as a safe-haven asset during times of uncertainty, appeared to be caught in the crosscurrents of investor panic. Analysts suggested that some investors may be liquidating gold positions to realize profits or meet margin calls on other falling assets.
“There’s a lot of confusion and uncertainty in the markets about whether there’s any room for de-escalation, especially with tensions at a boiling point,” said Yeap Jun Rong, market strategist at IG. “While some of the weakness in gold could be attributed to profit-taking, the broader theme remains one of resilience, as safe-haven demand offers some cushion amid the volatility.”
Trade War Intensifies
The latest slide in gold prices came after China retaliated against the U.S. tariffs announced by the Trump administration. Beijing introduced sweeping countermeasures, including a 34% levy on all U.S. goods and export restrictions on key rare earth metals.
The growing trade tensions have fueled fears of a global economic downturn, wiping nearly $6 trillion off the value of U.S. equities last week alone. Japan’s Nikkei index also suffered a sharp blow, plummeting nearly 9% during early trading on Monday.
Federal Reserve Chair Jerome Powell acknowledged the mounting risks, noting that tariffs could push inflation higher and economic growth lower—posing a complex challenge for the U.S. central bank as it navigates a turbulent policy environment.
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