Bengaluru — Gold prices touched a three-week high on Monday, supported by demand for safe-haven bullion after US President Donald Trump threatened to impose a 30% tariff on imports from the EU and Mexico.
Spot gold was steady at $3,354.83/oz by 4.10am GMT, after hitting its highest point since June 23 earlier in the session. US gold futures rose 0.2% to $3,371.
“We are seeing safe-haven demand coming back into the picture due to this uncertainty on the implementation of US global trade tariffs policy,” Oanda senior market analyst Kelvin Wong said.
“Near-term outlook looks positive for gold and if gold prices are able to have a daily close above $3,360, it could potentially advance higher towards the next resistance level at $3,435.”
Trump on Saturday threatened to impose a 30% tariff on imports from Mexico and the EU starting on August 1, after weeks of negotiations with the major US trading partners failed to reach a comprehensive trade deal.
Both the EU and Mexico described the tariffs unfair and disruptive, while the EU said it would extend its suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement.
Investors now await the US inflation data for June due on Tuesday for more cues on the Federal Reserve’s interest rate path. Markets are pricing in just more than 50 basis points (bps) worth of Fed easing by December.
Gold, often considered as a safe-haven asset during economic uncertainties, tends to do well in a low-interest-rate environment.
Capping gold’s gains, the dollar index edged 0.1% higher against a basket of rival currencies, making gold more expensive for holders of other currencies.
Gold speculators cut net long positions by 1,855 contracts to 134,842 in the week ended July 8.
Spot silver gained 1.2% to $38.82/oz, platinum fell 1.3% to $1,380.67 and palladium gained 0.2% to $1,216.77
Reuters
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.