Gold Rises Amid Escalating Global Tensions and Trade Policy Uncertainty
Gold prices climbed on Monday as heightened geopolitical risks and renewed trade tensions fueled demand for traditional safe-haven assets.
The precious metal rose nearly 2% in early trading, rebounding from a decline last week, as investors sought stability amid rising global uncertainty.
Spot gold gained 1.9% to $3,352.69 an ounce as of 08:24 GMT, reaching its highest level since May 23. US gold futures mirrored the move, climbing to $3,377.50. The gains follow a volatile period in global markets driven by developments on multiple geopolitical fronts.
In Eastern Europe, Ukraine carried out a series of drone strikes deep into Russian territory over the weekend, hitting airfields in eastern Siberia. In response, Russia launched one of its lengthiest aerial assaults on Kyiv, further escalating the conflict ahead of a second round of peace talks scheduled for later this week in Istanbul.
At the same time, global trade tensions resurfaced. US President Donald Trump announced plans to double tariffs on imported steel and aluminum to 50%, prompting a warning of retaliatory measures from Canada. Trump also criticized China for allegedly backtracking on a recent agreement concerning critical minerals, raising doubts about the stability of the current US-China trade truce. Treasury Secretary Scott Bessent indicated that Trump is expected to speak with Chinese President Xi Jinping to address the issue.
The confluence of geopolitical strife and trade policy uncertainty has restored some of gold’s appeal as a store of value. While the metal has pulled back from its all-time high above $3,500 an ounce reached in April, it remains up more than 25% for the year. Analysts at Goldman Sachs recently reaffirmed gold’s role as a long-term hedge against inflation and global instability.
“A combination of risk-off sentiment in Asian equities, escalating tensions in Ukraine, and US-China trade concerns are all lifting demand for safe-haven assets such as gold,” said UBS analyst Giovanni Staunovo.
Adding to gold’s momentum was a weaker US dollar, which dipped 0.5% against a basket of major currencies. A softer dollar typically enhances gold’s attractiveness to holders of other currencies.
Other precious metals also saw mixed movements. Spot silver rose 1.3% to $33.42 an ounce, palladium edged up 0.1% to $972.25, while platinum slipped 0.4% to $1,051.95.
Investors are now looking ahead to several key economic events, including the release of US labor-market data later this week and scheduled speeches from Federal Reserve Chair Jerome Powell and other central bank officials. These developments could offer further clues about the Fed’s interest rate outlook, another factor that heavily influences gold’s performance.
