Gold prices touched a three-week high on Monday, supported by demand for safe-haven bullion after U.S. President Donald Trump threatened to impose a 30% tariff on imports from the European Union and Mexico.
Spot gold was steady at $3,354.83 per ounce, as of 0410 GMT, after hitting its highest point since June 23 earlier in the session. U.S. gold futures rose 0.2% to $3,371.
“We are seeing safe-haven demand coming back into the picture due to this uncertainty on the implementation of U.S. global trade tariffs policy,” OANDA senior market analyst Kelvin Wong said.
“Near-term outlook looks positive for gold and if gold prices are able to have a daily close above $3,360, it could potentially advance higher towards the next resistance level at $3,435.”
Trump on Saturday threatened to impose a 30% tariff on imports from Mexico and the European Union starting on August 1, after weeks of negotiations with the major U.S. trading partners failed to reach a comprehensive trade deal.
Both the European Union and Mexico described the tariffs unfair and disruptive, while the E.U. said it would extend its suspension of countermeasures to U.S. tariffs until early August and continue to press for a negotiated settlement.
Gold gains as ‘dollar negative’ sentiments take hold
Investors now await the U.S. inflation data for June due on Tuesday for more cues on the Federal Reserve’s interest rate path. Markets are currently pricing in just over 50 basis points worth of Fed easing by December.
Gold, often considered as a safe-haven asset during economic uncertainties, tends to do well in a low-interest-rate environment.
Capping gold’s gains, the dollar index edged 0.1% higher against a basket of rival currencies, making gold more expensive for holders of other currencies.
Gold speculators cut net long positions by 1,855 contracts to 134,842 in the week ended July 8.
Spot silver gained 1.2% to $38.82 per ounce, platinum fell 1.3% to $1,380.67 and palladium gained 0.2% to $1,216.77
Comments
Comments are closed for this article.