Gold shines amid geopolitical tensions and Trump's tariff threats

Gold prices rallied at the start of the week, supported by escalating geopolitical tensions between Russia and Ukraine, alongside renewed tariff threats from U.S. President Donald Trump targeting steel and aluminum imports. These developments prompted investors to seek safety in traditional haven assets, led by gold.

Trump’s tariff move raises market anxiety: On Friday, Trump announced plans to double tariffs on steel and aluminum imports from 25% to 50%, sparking concerns in global markets and prompting the European Commission to warn of retaliatory measures. The news injected volatility into markets and added fuel to the safe-haven rally.

Russia-Ukraine conflict boosts safe-haven demand: The rising intensity of the Russia-Ukraine conflict also lifted gold prices, as Russia escalated drone strikes while Ukrainian forces launched one of their boldest counterattacks to date. With another round of peace talks expected in Istanbul, market fears of broader conflict escalation added to the uncertainty.

Tim Waterer, Chief Market Analyst at KCM Trade, commented:

Gold is benefiting from growing uncertainty—both geopolitical and trade-related—alongside a weaker U.S. dollar, which adds to its appeal.

Market snapshot: Gold, Dollar, and Related Assets By Monday morning, gold showed strong performance:

• Spot gold rose 0.7% to $3,311.33 per ounce.
• U.S. gold futures climbed 0.6% to $3,335.40.

Meanwhile, the U.S. Dollar Index fell by 0.1%, enhancing gold’s attractiveness for non-dollar holders.

Friday’s pullback: Profit-taking and technical pressure – Despite the bullish backdrop, gold prices declined on Friday, driven by profit-taking and mild technical corrections. This came even as recent inflation data increased expectations for a more dovish Federal Reserve stance.

• August gold futures fell 0.85% or $28.5 to settle at $3,315.40.
• Weekly losses totaled approximately 2.33%, while May closed nearly 1% lower.

Fed in focus this week: Investor attention is now turning to several key speeches from Federal Reserve officials, especially Chair Jerome Powell, whose remarks are expected to shed light on the Fed’s next policy steps.

Historically, gold thrives in low interest rate environments and during times of heightened geopolitical or economic uncertainty—making the current macro backdrop supportive despite recent volatility.

Mixed performance across metals: Other precious metals showed varied movements:

• Silver gained 0.3% to $33.08 per ounce.
• Platinum fell 0.4% to $1,051.63.
• Palladium dipped 0.3% to $967.62.

US–China trade developments under watch: Adding to the week’s events, Treasury Secretary Scott Bisnett announced that President Trump plans to speak with Chinese President Xi Jinping in the coming days, aiming to find resolutions to ongoing trade disputes, particularly around strategic metals.

Conclusion: Gold remains well-supported as markets navigate a complex blend of geopolitical risks, tariff uncertainty, and potential shifts in monetary policy. While technical corrections may create short-term fluctuations, the broader environment continues to favor safe-haven flows.

(This article was written by the author with assistance from language generation tools to support structure and clarity. All insights and opinions are entirely the author’s own.)