Gold Extends Robust Gains as Trade Worries Spur Flight to Safety
(Bloomberg) -- Gold edged higher following its biggest daily jump in four weeks on a weaker dollar and stronger demand for havens due to trade and geopolitical risks.
Bullion was near $3,390 an ounce after surging 2.8% on Monday as relations between Washington and Beijing deteriorated and the Russia-Ukraine war intensified. China accused the US of violating their recent trade deal and vowed to take measures to defend its interests, even as the White House later confirmed that the nation's leaders are likely to speak this week.
Meanwhile, the European Union issued a fresh warning of countermeasures if President Donald Trump follows through on his tariff threats.
With few signs of negotiation breakthroughs on the horizon, the latest developments have scuppered optimism that the US was progressing toward making a deal with the two biggest American trading partners. The greenback fell to its lowest since 2023, reflecting growing concerns over Trump's policies and their impacts on the economy.
All of that is underscoring gold's haven appeal, which has ebbed since it hit a record high above $3,500 an ounce in April. The precious metal is still up more than a quarter so far this year though, with Goldman Sachs Group Inc. saying last week it would remain a hedge against inflation in long-term portfolios, along with oil.
Spot gold rose 0.2% to $3,389.61 an ounce as of 7:23 a.m. in Singapore. The Bloomberg Dollar Spot Index steadied, following a 0.6% loss on Monday. Silver was flat, after hitting the highest since October. Platinum edged up, and palladium was little changed.
Looking ahead, there are a slew of US labor-market indicators due this week — including the May employment report — which will help to steer the Federal Reserve's monetary policy. Lower rates are typically positive for non-interest-bearing bullion.
More stories like this are available on bloomberg.com
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