By Rahul Paswan
(Reuters) – Gold prices slid on Monday after rising to all-time highs in the previous session, as the U.S. dollar surged higher on mounting fears of a global trade war following U.S. President Donald Trump’s sweeping tariff measures.
Spot gold fell 0.2% to $2,796.09 per ounce by 0825 GMT after touching a record peak at $2,817.23 on Friday. U.S. gold futures shed 0.2% to $2,830.80.
While tariff announcements should have typically driven up gold prices due to increased safe-haven demand, a higher dollar and expectations of fewer rate cuts are exerting pressure, Reliance Securities’ senior analyst Jigar Trivedi said. [USD/]
Trump on Saturday levied 25% tariffs on Canadian and Mexican imports and 10% on goods from China starting Feb. 4. White House officials said there would be no exclusions from tariffs.
Canada and Mexico ordered retaliatory measures, while China said it would challenge tariffs at the World Trade Organization and take unspecified countermeasures.
“This knee-jerk reaction could be short lived and I suspect gold will continue to outperform this year, given the threat of inflation and next round of trade wars resurfacing,” said Matt Simpson, a senior analyst at City Index.
While gold is considered a safe investment during economic and financial stress, a surging dollar makes gold costlier for buyers holding other currencies.
“The $2,750 range would need to hold to protect from a larger pullback,” said Tim Waterer, chief market analyst at KCM Trade.
Citi said that further tariff escalation should be bullish for gold and will likely push prices to $3,000 per ounce.
Meanwhile, J.P. Morgan noted that bearish contagion from equities could weigh on gold in the immediate near-term but disruptive tariffs continue to fuel a medium-term bull case for bullion.
Spot silver dropped 0.2% to $31.23 per ounce and platinum declined 1.5% to $962.98. Palladium added 0.1% to $1,009.43.
(Reporting by Rahul Paswan and Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu and Sumana Nandy)
