Gold Prices Rise Amid Dollar Weakness and Growing Trade & Geopolitical Tensions
Gold prices recorded a notable increase in early Monday trading, supported by a weakening U.S. dollar and heightened concerns over global trade conflicts and geopolitical instability. Gold, often viewed as a safe-haven asset during uncertain times, responded positively to recent developments in financial and political arenas.
Price Update
Spot gold rose by 0.6% to $3,309.89 per ounce, while U.S. gold futures gained by the same margin to reach $3,333.30, according to Reuters data. Meanwhile, the U.S. dollar index dropped by 0.1%, making gold more attractive to holders of other currencies.
Key Drivers
The rise followed an announcement by U.S. President Donald Trump stating his intention to double tariffs on steel and aluminum imports from 25% to 50%, prompting a warning from the European Commission about potential retaliatory measures.
Geopolitical tensions further escalated due to intensified military conflict between Russia and Ukraine, including one of the largest drone battles in the war, the bombing of a bridge used by passenger trains in Russia, and strikes on Russian nuclear-capable bombers deep in Siberia.
Monetary Policy Outlook & Economic Data
Market participants currently anticipate the U.S. Federal Reserve will cut interest rates by 50 basis points in 2025, starting in October. In terms of economic indicators, the U.S. Personal Consumption Expenditures (PCE) index rose by 2.1% year-over-year in April, slightly below expectations of a 2.2% increase.
Other Precious Metals Performance
Silver rose by 0.2% to $33.04 per ounce. Platinum declined by 0.2% to $1,054.28, while palladium remained unchanged at $970.79.
The recent upward movement in gold and other precious metal prices reflects mounting concerns in the global economic landscape. The combination of a softer dollar, increased geopolitical risks, and shifting monetary policy expectations continues to influence investor sentiment and market dynamics, suggesting further volatility in the period ahead.
