Gold prices rose 0.15% as investor uncertainty over U.S. tariffs, set to take effect next week, boosted demand for the metal as a safe-haven asset.
"Concerns about the extent and impact of upcoming U.S. tariffs continue to support gold as a hedge against potential surprises," said IG market strategist Yeap Jun Rong. President Donald Trump stated on Monday that auto tariffs were "coming soon," but also hinted that not all proposed levies would be imposed on April 2. Markets interpreted this as a sign of possible flexibility, providing some relief after weeks of volatility.
Trump's tariff policies are widely expected to slow economic growth, increase trade tensions, and contribute to inflationary pressures. Investors are also watching the Federal Reserve's stance on monetary policy. Atlanta Fed President Raphael Bostic said he expects slower progress in combating inflation in the coming months, prompting him to revise his forecast to a more modest 0.25% rate cut by the end of the year.
So far in 2025, the metal has surged around 15%, driven by expectations of Fed rate cuts, concerns over tariffs, and broader geopolitical instability. Traders are now focused on Friday’s release of the Personal Consumption Expenditures (PCE) index, the Fed’s preferred measure of inflation, which could provide further insight into the central bank’s policy outlook.