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Gold prices rise as tariff worries boost demand for safe-havens

Gold prices rose on Monday, as investors sought refuge in gold bullion due to the escalation of the Russian conflict in Ukraine and President Donald Trump’s threat to double tariffs against imported steel and aluminium.

As of 0204 GMT, spot gold rose 0.5% to $3,305.85 per ounce. U.S. Gold Futures increased 0.4% to $3329.80.

Tim Waterer is the chief market analyst for KCM Trade.

Gold is being supported by a drop in the dollar and a decline in risk assets.

Trump announced on Friday his intention to increase tariffs on steel and aluminum imports to 50%, up from 25%. The European Commission warned that Europe was prepared to take retaliatory action.

Ukraine and Russia intensified hostilities in advance of their second round peace talks in Istanbul. The wave of attacks included one of Ukraine’s most daring strikes of the conflict and an overnight drone attack by Russia.

Bullion is now cheaper for foreign buyers due to the 0.2% decline in the U.S. Dollar index.

The markets are waiting for clues from the Federal Reserve's officials on the outlook of monetary policy. Fed Chair Jerome Powell is scheduled to speak at the end of the day.

Fed Governor Christopher Waller stated that rate cuts are still possible this year, despite the Trump Administration's tariff regime likely to temporarily increase price pressures.

In an environment of low interest rates, gold, which is regarded as a safe haven asset in times of geopolitical or economic uncertainty, thrives.

According to Treasury Secretary Scott Bessent, Trump and Chinese president Xi Jinping will likely speak soon in order to resolve trade issues, including a dispute about critical minerals.

Other than that, silver spot was unchanged at $32.99 per ounce. Platinum was down 0.6% to $1,049.72, and palladium was down 0.5% at $965.77.

(source: Reuters)