Gold prices fell in Asian trading on Monday, retreating from record highs following reports of US President Donald Trump easing tariffs. According to reports, the tariffs will be less severe than previously feared, significantly impacting demand for safe havens.
Despite gold’s decline, a weaker dollar limited its losses. Other metals prices also rose slightly, with copper supported by expectations of tighter global supplies, particularly in light of US tariffs and the closure of some Chinese copper smelters.
Despite the decline, gold remains close to its recent peak, supported by continued uncertainty surrounding the US economy.
Details of the decline in gold markets
Spot gold fell 0.2% to $3,018.51 per ounce, while May gold futures settled at $3,049.30 per ounce. Last week, the spot price reached an all-time high of $3,057.5 per ounce.
Gold’s losses were the result of a jump in Wall Street futures, as investors bet that the impact of Trump’s tariffs would be less pronounced than expected. Reports from Bloomberg and the Wall Street Journal indicate that the tariffs on autos, pharmaceuticals, semiconductors, and other commodities will not take effect on April 2, as previously anticipated.
Expectations suggest that the reciprocal tariffs between the United States and its trading partners will target a narrow group of 15 countries with significant trade imbalances with the United States. This focus should limit the impact of the tariffs on the broader global economy. Gold should continue to benefit from this situation, serving as a hedge against volatility in the dollar and bond markets.
The Impact of Tariffs on Risk Appetite
Although the White House has not confirmed these reports, they have kept markets in a state of uncertainty. The imposition of tariffs on key US imports is expected to increase domestic inflation, potentially weighing on future economic activity.
At the same time, demand for gold as a safe haven remains largely intact amid ongoing global economic tensions. Concerns about an escalation in the trade war, coupled with ongoing tensions in the Middle East, have increased the appetite for gold as a hedge.
Economic Analysis and Market Outlook
Key US economic data is expected this week, including the Purchasing Managers’ Index (PMI), the Personal Consumption Expenditures (PCE) price index, and revised GDP data for the fourth quarter of last year.
Meanwhile, gold prices continue to attract some buyers amid the current decline, with many seeking to capitalize on the weak US dollar. In this context, bets on a Fed rate cut are weighing on the dollar, supporting the gold/USD pair.
Despite the slight improvement in global risk sentiment, the focus remains on news related to tariffs and the US economy, with traders awaiting additional comments from FOMC members in the coming days.
Gold supported by a weaker dollar and a positive risk sentiment
In the first half of the European session, gold prices rose slightly, as the yellow metal showed some recovery after a series of daily losses. Despite the overall improvement in risk sentiment, higher US bond yields remain a pressure on gold.
The US dollar retreated after a three-day rally, as markets expected the Federal Reserve to cut interest rates again soon.
Daily Brief: The impact of Trump’s reports on risk appetite and gold
Reports over the weekend that US President Donald Trump plans to reduce the scope of mutual tariffs affected gold markets and increased risk appetite among investors. This shift in expectations led to a decline in gold prices as investors increased their appetite for riskier assets. This, in turn, is considered a key factor supporting the non-yielding yellow metal.
Technical Forecast for Gold Prices
Technically, gold is showing strong support at $3,000. If it continues to decline, some buyers may appear near this level. A break above this level could trigger a technical sell-off that may push gold to lower levels such as $2,982-$2,978.
Conversely, gold’s all-time high at $3,057-$3,058 may face some resistance. Continued buying could push prices higher, suggesting a potential extension of the bullion’s three-month upward trend. Other Metals Performance, as well as concerns about Trump’s broader tariff plans
For other metals, platinum futures rose 0.3% to $981.15 per ounce, while silver futures rose 0.7% to $33.735 per ounce, after both metals saw some losses the previous week.
Copper Prices Rise Amid Supply Concerns
In industrial metals, copper prices rose 0.6% to $9,927.90 per ton, supported by expectations of additional stimulus in China, the world’s largest copper importer. Concerns about the impact of tariffs on US copper imports also fueled the price increase.
Additional concerns related to the closure of some Chinese copper smelters, which could lead to a reduction in global supplies of the metal. Given these factors, copper could continue to post gains in the near term.
