Gold prices experienced an increase as a result of Donald Trump’s tariff threats. The increase was also supported by a weaker dollar. Trump intends to increase tariffs on steel and aluminum. This action elicited a cautionary note regarding potential reprisals from Europe. Geopolitical tensions between Ukraine and Russia have intensified. Trump and Xi Jinping are anticipated to engage in discussions regarding trade matters in the near future. On Monday, gold prices experienced an uptick as U.S. President Donald Trump issued a warning about potentially doubling tariffs on imported steel and aluminum. Additionally, a weaker dollar contributed to the support for bullion priced in greenbacks. Spot gold increased by 0.6% to $3,309.89 an ounce, as of 0100 GMT. U.S. gold futures experienced an increase of 0.6%, reaching $3,333.30.
The U.S. dollar index dipped by 0.1%, resulting in a decrease in the cost of bullion for international purchasers. On Friday, Trump announced his intention to increase tariffs on imported steel and aluminum from 25% to 50%, leading the European Commission to caution that Europe stands ready to respond with retaliatory measures. Geopolitical tensions have intensified as Ukraine and Russia significantly escalated their conflict, marked by one of the largest drone battles to date, the destruction of a Russian highway bridge over a passenger train, and a bold assault on nuclear-capable bombers deep within Siberia.
Gold is viewed as a safe-haven asset amid geopolitical and economic uncertainty. In the interim, discussions between Trump and Chinese President Xi Jinping are anticipated to occur shortly, aiming to resolve trade matters, notably a contention regarding essential minerals, as indicated by Treasury Secretary Scott Bessent on Sunday. On Friday, the U.S. Personal Consumption Expenditures Price index recorded a year-on-year rise of 2.1% in April, compared to a forecast of 2.2%.
Investors currently anticipate a 50-basis-point rate cut by the U.S. Federal Reserve this year, commencing in October. Fed Governor Christopher Waller indicated that interest rate cuts are still a possibility later this year, despite the likelihood that the Trump administration’s tariff regime will temporarily elevate price pressures. In other markets, spot silver increased by 0.2% to $33.04 per ounce, while platinum experienced a decline of 0.2% to $1,054.28, and palladium remained unchanged at $970.79.