Gold Steadies as Investors Take Stock After Broad Market Selloff
Gold steadied after a modest decline as investor concern about a US slowdown ignited a broad retreat in stocks and most commodities.
Bullion traded above $2,887 an ounce following a drop of less than 1% on Monday. President Donald Trump signaled over the weekend that the US economy could suffer before it gets better as he reshapes trade policy with tariffs, stoking concern about a potential recession. Gold can dip during sharp market slumps as investors may sell the metal to cover losses elsewhere.
Gold remains 10% higher this year after hitting successive records. The rally has been driven by fears about the disruption caused by the Trump administration, central-bank buying, and speculation the Federal Reserve may cut interest rates further. Lower borrowing costs tend to benefit non-yielding gold.
While bullion’s advance has sapped demand for physical metal in some of Asia’s leading economies, it’s been accompanied by steady investment flows into gold-backed exchange-traded funds. These reached the highest level since December 2023 last week, according to a Bloomberg tally.
“Gold finds itself without a solid physical-market floor” amid lackluster demand in India and China, Standard Chartered Plc analyst Suki Cooper said in a note. Still, prices are expected to hit fresh highs this year, with stronger flows into ETFs needed to offset the decline in physical demand, she said.
Ahead of Monday’s market selloff, investors had been scaling back exposure to gold. Hedge funds cut bullish positions to a nine-week low, according to the latest Commodity Futures Trading Commission data.
Spot gold was little changed at $2,887.77 an ounce at 8:58 a.m. in Singapore. The Bloomberg Dollar Spot Index was flat after rising on Monday. Silver, palladium and platinum all extended losses.
Source: Bloomberg
