Gold prices rebound on weaker US dollar and tariff concerns
Gold prices rose on Monday after a slump to a three-week low in the previous session, driven by a weaker dollar and safe-haven buying in response to concerns over U.S. President Donald Trump's tariff policies.
Spot gold gained 0.5% to $2,873.11 an ounce as of 09:29 a.m. ET (1429 GMT). U.S. gold futures rose 1.3% to $2,884.50.
"I think ultimately we are in a very bullish market and gold can get much higher than $3,000... with tariffs and possible retaliation I still think you're seeing central banks come in and buy," said Daniel Pavilonis, senior market strategist at RJO Futures.
The dollar index dropped by 0.8%, moving away from a more than two-week high hit in the previous session, reflecting weakness that makes dollar-priced gold less expensive for buyers holding other currencies.
Trump is expected to decide on Monday what level of tariffs he will impose effective from early Tuesday on imports from Canada and Mexico. He had vowed to impose 25% tariffs on the two countries' imports but this was paused for a month which expires on Tuesday.
Last week, Trump threatened China with an extra 10% duty, also set to take effect on Tuesday, resulting in a cumulative 20% tariff.
Investors' focus is also shifting to the ADP employment report due on Wednesday and the U.S. non-farm payrolls report due on Friday for more clues on the Federal Reserve's monetary policy.
Expectations around the Fed, which has held interest rates steady since December, are uncertain now ahead of the data.
Despite being widely viewed as a hedge against geopolitical and economic uncertainty, non-yielding gold becomes less attractive to investors when interest rates rise.
Spot silver was up 1.7% at $31.68 an ounce, platinum gained 1.3% to $959.90 and palladium added 2.1% to $938.96.
"We see room for larger gains in silver as the gold rally consolidates and global industrial production signals a modest recovery," UBS analysts said in a note.
Source: Reuters
