Trade Tensions Drive Safe-Haven Demand for Gold

Gold prices surged during Asian trading on Monday, driven by fresh indications of U.S.-China friction and uncertainty surrounding President Trump’s tariff plans. Following China’s outright dismissal of Trump’s claims of violating a Geneva trade agreement, tensions have escalated, with China pledging to defend its interests, causing market volatility.

Factors Supporting Price Gains

Gold has recently enjoyed upward trends, bolstered by:

• Fed’s Dovish Stance: Comments from Federal Reserve Governor Christopher Waller indicated a preference for rate cuts later this year, contributing to dollar softness that benefits non-yielding assets such as gold.

Spot Price Movements

• Current Gold Spot Price: Increased by 0.8% to $3,315.68/oz

• August Futures: Up 0.7% to $3,338.52/oz

Silver prices also experienced gains (futures rose by 0.6% to $33.22/oz), while platinum declined by 0.5% to $1,050.10/oz. Traders observed that a previous dollar recovery had pressured gold prices, but growing trade uncertainties paired with dovish Fed signals have quickly changed that trend.

Outlook on Gold’s Performance

With uncertainties surrounding U.S.-China relations and continued tariff threats from Trump, gold could maintain strong appeal as a safe-haven asset. If the dollar remains weak, particularly as markets factor in potential Fed rate cuts, gold prices might test recent highs. In contrast, any resolution toward reduced tariffs could temper gold’s rally.