Gold Prices Climb to Three-Week High Amid Escalating Trade Tensions
Gold prices surged to their highest level in three weeks on Monday, supported by growing safe-haven demand following renewed trade threats involving the United States, the European Union, and Mexico.
Spot gold rose 0.5% to $3,371.34 per ounce , marking its highest level since June 23. U.S. gold futures also advanced 0.7% to $3,386.20 per ounce, according to data from Reuters.
The rally comes as markets react to the potential imposition of a 30% tariff on imports from the EU and Mexico starting August 1, following prolonged trade negotiations that failed to deliver a comprehensive agreement. The threat of higher tariffs intensified concerns over global trade instability, prompting investors to seek shelter in gold.
The EU and Mexico have labeled the proposed measures as unfair and disruptive. In response, the European Union extended its suspension of retaliatory steps until early August, maintaining efforts to reach a negotiated resolution.
Market participants are also closely watching for the release of U.S. inflation data for June, scheduled for Tuesday. The figures are expected to offer clearer signals regarding the Federal Reserve’s interest rate outlook, with current market pricing reflecting a potential 50-basis-point rate cut by December.
Meanwhile, holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, declined by 0.12% to 947.64 metric tons on Friday, down from 948.80 tons the previous day.
Speculative positioning also shifted, with data from the Commodity Futures Trading Commission showing a net reduction of 1,855 contracts in gold futures for the week ending July 8, bringing total net long positions to 134,842.
Among other precious metals, silver gained 0.4% to $38.49 per ounce. Platinum fell 1.1% to $1,384.00, while palladium declined 1.7% to $1,194.40 per ounce.
