Gold prices climbed after last week’s significant dip, as investors reassess the economic outlook amid US President Donald Trump’s imminent tariff plans. Bullion traded above $2,860 an ounce, following its first weekly loss of 2025, driven by traders cashing in profits after a record-breaking start to the year. Trump is set to impose 25% tariffs on Canada and Mexico, possibly as early as this week, and plans to double levies on China. These moves have raised concerns about the potential impact on the already-slowing US economy, which in turn has heightened gold’s appeal as a safe-haven asset.
Market concerns about the economy have fueled growing expectations of interest rate cuts by the Federal Reserve, which would further enhance gold’s attractiveness as a non-yielding asset. “The upcoming US payrolls report is critical for assessing the health of the employment market,” said Priyanka Sachdeva, an analyst at Phillip Nova Pte Ltd. “Weak data could prompt the Federal Reserve to consider rate cuts, providing additional support to gold prices.”
Meanwhile, inflation remains a key concern for investors, with Trump’s proposed tariffs potentially keeping price pressures elevated. This view contributed to a surge in the US dollar last week, which typically makes dollar-denominated gold more expensive for foreign investors. Recent US data has raised fears of stagflation—where the economy experiences slow growth and high inflation—which could further boost demand for gold, traditionally seen as a store of value in uncertain times.
At 7:16 a.m. in London, spot gold rose by 0.2% to $2,862.61 an ounce, recovering after a 2.7% decline last week. The Bloomberg Dollar Spot Index slipped 0.2%. Silver and palladium prices also gained, while platinum remained unchanged.
Related topic:
Gold Futures Vs Gold ETFs: What Is The Difference?
