Gold Rises as Trump Tariff Plans Raise Concerns
Gold rose, after its biggest one-day drop in two months, on concerns over President Donald Trump’s latest trade threats. Bullion was trading near $2,900 an ounce, after falling 1.6% on Friday. Monday’s gains came even after the 14-day relative strength index — a gauge of the speed and intensity of moves — showed the precious metal had reached overbought levels in recent sessions.
Market participants are awaiting more insight into Trump’s reciprocal tariff plans, which could escalate global trade tensions, said Manav Modi, an analyst at Motilal Oswal Financial Services Ltd. “President Trump has been upbeat about the tariff threat, saying the levies on cars will go into effect on April 2,” he said. While there are concerns about what Trump might do next, there is speculation that the tariff threat is primarily being used as a negotiating tool. His administration’s trade policies have become increasingly chaotic with delays and exceptions, with geopolitical and economic uncertainties likely to add to gold’s appeal as a safe-haven asset.
Traders were also studying the latest U.S. economic data for clues on the Federal Reserve’s possible easing path, after a report on Friday showed retail sales fell by the most in nearly two years. The figures prompted traders to unwind bets that the central bank would cut interest rates in September. Lower borrowing costs typically benefit bullion, which doesn’t pay interest.
Money managers cut their bullish bets on gold to a four-week low in the week to Feb. 11, the latest Commodity Futures Trading Commission report showed on Friday. Despite Friday’s decline, gold still posted its seventh straight weekly gain, the longest winning streak since 2020. The gains were helped in part by continued buying from central banks including China’s central bank, along with rising holdings in bullion-backed exchange-traded funds. Bullion hit a record high of $2,942.68 an ounce on Tuesday.
Spot gold rose 0.6% to $2,899.81 an ounce as of 1:08 p.m. in Singapore, after a weekly gain of 0.8%. The Bloomberg Dollar Spot Index fell 0.1%. Palladium prices rose more than 1%, while silver and platinum also rose.
Source: Bloomberg
