Gold prices edged higher on Monday, reversing recent losses, as investors turned to the precious metal amid renewed trade tensions and a weaker U.S. dollar. As of 0215 GMT, spot gold rose by 0.7% to $3,223.55 per ounce, while U.S. gold futures climbed 1.3% to $3,228.70.
The gains came after gold posted a sharp decline of over 2% last Friday — its steepest weekly drop since November — driven by optimism around a U.S.-China trade agreement that had boosted risk appetite.
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However, sentiment shifted following U.S. Treasury Secretary Scott Bessent’s remarks on Sunday, where he reiterated former President Donald Trump’s threat to impose tariffs on trade partners not negotiating “in good faith.” The comments revived fears of a renewed trade conflict, prompting investors to seek safe-haven assets like gold.
A 0.3% decline in the dollar further supported gold’s upward movement, as it made the metal more affordable for holders of other currencies. Additionally, Moody’s recent downgrade of the U.S. credit rating due to rising debt concerns added to investor anxiety.
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KCM Trade’s Chief Market Analyst Tim Waterer noted that the credit downgrade had reignited demand for gold, especially amid growing market caution. He also suggested that signs of economic softness — including weaker U.S. retail sales and producer prices — may influence the Federal Reserve’s timing for potential rate cuts later this year.
In other metals, spot silver gained 0.5% to $32.42 per ounce, platinum rose to $990.71, and palladium increased to $965.23.