Bengaluru — Gold prices fell nearly 1% on Monday after rising to a record high in the previous session, as the dollar strengthened on the mounting fear of a global trade war after US President Donald Trump’s sweeping tariff measures.
Spot gold fell 0.9% to $2,776.05/oz by 3.03am GMT after prices hit a record peak at $2,817.23 on Friday. US gold futures were 0.9% lower at $2,810.80.
The US dollar index hovered near a three-week peak, making greenback-priced gold more expensive for foreign buyers.
Trump on Saturday levied 25% tariffs on imports from Canada and Mexico and 10% on goods from China starting on Tuesday. White House officials said there would be no exclusions from the tariffs.
Canada and Mexico ordered retaliatory measures, while China said it would challenge tariffs at the World Trade Organisation and take unspecified countermeasures.
“Markets are looking rattled about the tariff dramas and demand for safe-haven assets such as gold could look to limit the immediate downside ... though the soaring US dollar could be an inhibiting factor,” said Tim Waterer, chief market analyst at KCM Trade.
“The $2,750 range would need to hold to protect from a larger pullback.”
Bullion is considered a safe investment during periods of economic and geopolitical turmoil.
Citi said in a note that further tariff escalation should be bullish for gold and was likely to push prices to $3,000/oz.
Meanwhile, JPMorgan noted that bearish contagion from equities could weigh on gold in the immediate near-term but disruptive tariffs continue to fuel a medium-term bull case for bullion.
Comex gold speculators cut net long position by 3,766 contracts to 230,592 in the week to January 28, data showed.
Spot silver dropped 1.4% to $30.87/oz, platinum fell 1.9% to $958.72, and palladium declined 1.7% to $991.50.
Reuters
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