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Gold Prices Climb as Market Reacts to Economic & Political Tensions
Gold prices continued their bullish trend on Monday, climbing above $2,900 per ounce, fueled by a weaker U.S. dollar and heightened concerns over a potential trade war as President Donald Trump announced new tariff threats.
As of 13:55 GMT, spot gold was up 0.5% at $2,896.41, after hitting an intraday high of $2,906.38. Last week, gold reached an all-time high of $2,942.70. Meanwhile, U.S. gold futures rose 0.3% to $2,909.20.
A weakening dollar, which hovers near a two-month low, has bolstered gold’s appeal by making it more affordable for investors using other currencies.
Trump’s Tariff Strategy Fuels Market Uncertainty
On Friday, President Trump reaffirmed his commitment to new tariffs, announcing that levies on automobiles would be implemented as early as April 2, 2025. This follows a series of aggressive trade measures that have contributed to global market volatility.
The uncertainty surrounding international trade has heightened demand for gold as a hedge against economic instability.
Meanwhile, global attention remains fixed on ongoing negotiations related to the Russia-Ukraine conflict. U.S. Secretary of State Marco Rubio stated on Sunday that Kyiv and European nations would be integral to any potential peace deal.
Gold Outlook & Market Influences
Gold has historically been a preferred hedge against inflation and geopolitical tensions. However, rising interest rates can curb its attractiveness by increasing the opportunity cost of holding non-yielding assets.
Investors are now watching for statements from Federal Reserve officials later today for insights into future monetary policy. The U.S. markets remain closed for Presidents’ Day, adding to limited market liquidity.
Other Precious Metals Performance
- Silver: Up 0.3% to $32.24 per ounce, reaching its highest level since October 31.
- Platinum: Slight gain of 0.1% to $980.43 per ounce.
- Palladium: Up 1.9% to $978.25 per ounce.
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