Gold Rises Amid Trade Uncertainty and Weaker Dollar
Gold prices experienced a notable increase, driven by rising global economic uncertainty and renewed trade tensions between the United States and China. The precious metal benefited further from a weakening U.S. dollar, prompting a flight to safe-haven assets amid concerns of a deeper-than-expected global slowdown.
Analysis Spot gold rose by 0.6%, reaching $3,370.67 per ounce, while U.S. gold futures climbed 0.5% to $3,394.90. This upward momentum was primarily supported by increased demand for gold as a safe-haven asset during times of market volatility and geopolitical tension.
The decline in the U.S. dollar index by 0.1% played a pivotal role in boosting gold prices, as it made the dollar-priced metal more affordable for holders of other currencies. Market sentiment was also influenced by signals of potential high-level discussions between the U.S. and China, creating further uncertainty around the future of global trade relations.
Additionally, the U.S. decision to reverse the move to double tariffs on steel and aluminum imports from the United Kingdom contributed to a cautious optimism in global markets.
A recent report from the Organisation for Economic Co-operation and Development (OECD) warned of a sharper global economic slowdown than previously anticipated. This coincided with mixed labor market data from the U.S., showing an increase in job openings in April but also a rise in layoffs to the highest level in nine months—signaling a potential cooling in employment growth.
The U.S. Federal Reserve maintained a cautious stance on monetary policy, citing risks stemming from ongoing trade tensions and prevailing economic uncertainties, reinforcing the demand for gold as a protective asset.
Performance of Other Precious Metals Silver prices rose by 0.3% to $34.59 per ounce, platinum gained 0.5% to $1,079.62, while palladium remained steady at $1,009.94.
The recent performance of gold reflects a continuation of its upward trajectory, supported by trade-related uncertainties and a softer dollar. In the current environment, gold remains an attractive option for investors seeking protection from volatility and macroeconomic risks.
