Gold Falls from Record as Trump Moves
Gold fell slightly from a record as markets digested the latest U.S. trade news from President Donald Trump, who has turned to safe havens amid growing confusion over his tariff agenda.
Bullion fell as much as 0.8% in early trading on Monday after a more than 6% gain last week that saw it trade above $3,245 an ounce for the first time. The decline came after a modest reprieve for the dollar from its recent rout, following a U.S. pause on reciprocal tariffs on smartphones, computers and other electronics.
However, the recovery stalled after Trump on Sunday signaled separate duties on consumer electronics and microchips were on the cards. A stronger U.S. dollar makes gold more expensive for foreign investors, as it is priced in the currency.
The precious metal is up more than 20% so far this year as investors have scrambled for safe havens, with Trump’s rapidly evolving trade policies causing major turmoil in stocks, bonds and the U.S. dollar amid fears of a global recession. In particular, the selloff in U.S. Treasury bonds highlighted the waning appetite for American assets, raising questions about whether sovereign debt remains a safe haven in times of trouble.
“Gold appears to be the clear beneficiary of the raging debate around the U.S. dollar, and we have seen gold prices in absolute beast mode,” Chris Weston, head of research at Pepperstone Group Ltd., said in a note Monday. Some traders say “gold is too hot to short, but also too overbought to chase,” he said.
Elsewhere this week, traders will be focused on how some of the world’s largest central banks are responding to the rapidly changing global outlook, with Singapore and the European Central Bank widely expected to ease monetary policy. Lower interest rates are usually positive for non-yielding bullion.
Spot gold fell 0.5% to $3,220.43 an ounce as of 7:37 a.m. in Singapore, after hitting an all-time high of $3,245.48 on Friday. The Bloomberg Dollar Spot Index was steady after a three-day decline. Silver fell, while platinum and palladium rose.
Source: Bloomberg
