Gold Surges Past $2,900 as Dollar Weakens
Gold prices climbed back above the $2,900 mark on Monday, driven by a weaker U.S. dollar and escalating trade tensions. Spot gold rose 0.6% to $2,900.44 per ounce by 11:34 GMT, following last week’s all-time high of $2,942.70. U.S. gold futures also saw gains, rising 0.4% to $2,912.10.
A softer dollar, hovering near a two-month low, made gold more attractive to investors using other currencies. Analysts suggest that geopolitical and economic uncertainties continue to fuel the demand for safe-haven assets like gold. “Investors are still seeking safety, especially with concerns over tariffs and a potential trade war,” said Giovanni Staunovo, an analyst at UBS. The ongoing central bank demand is also expected to keep gold prices on an upward trajectory, with predictions that the metal could soon reach the $3,000 mark.
Tariff Concerns Add Fuel to Gold’s Rally
The latest push in gold prices comes as U.S. President Donald Trump reiterated his stance on tariffs, signaling that new levies on automobiles could take effect as early as April 2. His administration has been aggressively pursuing trade actions since he began his second term, keeping global markets on edge.
Meanwhile, U.S. Secretary of State Marco Rubio stated that any resolution to the Russia-Ukraine conflict would involve input from both Kyiv and European leaders. Although progress in the peace talks could slightly dampen gold’s year-to-date gains, analysts believe there are still strong factors supporting higher prices. “While peace negotiations could ease some of gold’s momentum, the precious metal remains well-supported by other economic uncertainties,” noted Han Tan, Chief Market Analyst at Exinity Group.
Gold has long been seen as a hedge against inflation and geopolitical instability. However, rising interest rates can reduce its appeal, as higher yields make non-interest-bearing assets like gold less attractive.
Market Awaits Federal Reserve Signals
Investors are now closely watching the Federal Reserve for further clues on monetary policy. Several Fed officials are expected to speak later in the day, which could provide insights into the central bank’s stance on interest rates. Market participants are particularly cautious as any hint of policy tightening could impact gold’s upward momentum.
With U.S. markets closed for the President’s Day holiday, trading activity remains subdued. Other precious metals also saw gains, with spot silver climbing 1% to $32.50 an ounce, marking its highest level since October 31.
As gold continues to hover near record highs, investors remain alert to any shifts in economic policies, trade developments, and geopolitical tensions that could shape the metal’s future trajectory.
