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Gold rises above $3,000/oz on trade war fears and weaker dollar support

Gold prices rose above $3,000 an ounce on Monday as the weakening dollar and trade tensions between two of the world's largest economies boosted demand for this safe-haven investment.

By 8:44 am, spot gold had risen 0.8% to $3,007.21 per ounce. ET (1244 GMT), moving from a three-week low reached on Monday, in a retreat from the record high of last week at $3167.57. U.S. Gold Futures rose 1.6% to $3 021.90.

Gold remains bullish despite its three consecutive falls, with the prospect of lower U.S. rates and trade tensions boosting it, said Lukman otunuga senior research analyst at FXTM.

A solid breakout above 3,055 could open the door to $3,100 or $3,130. Gold could fall to $2,950 or $2,930 if the price of gold continues to decline.

Fears of a global recession have risen since U.S. president Donald Trump announced reciprocal tariffs in April. Investors are now seeking refuge in safe-haven assets such as gold.

China refused to submit to the "blackmail" of the U.S., as the global trade war sparked by Trump's tariffs shows no signs of abating.

Gold prices, which are often used to store value in times of financial and political uncertainty, have risen by 15% this year.

The dollar index has fallen against its competitors, making gold less expensive for holders of other currencies.

Investors will now be looking for clues in the minutes of the U.S. Federal Reserve’s latest policy meeting, due on Wednesday, to see if there are any changes on the horizon.

The traders are pricing in a 40% chance that the Fed will cut rates in May. In a low-interest rate environment, zero-yield gold tends to flourish.

Commerzbank wrote in a recent note that "the significant increase in expectations of rate cuts in recent days suggests that the gold prices will soon rise again."

Other than that, silver spot gained 0.4%, to $30.23 per ounce. Platinum rose 1.3%, to $925.33, and palladium fell 0.5%, to $914.18.

(source: Reuters)