Gold prices rallied over 2% on Monday, driven by renewed safe-haven demand and a weakening U.S. dollar, as market participants brace for potential economic policy shifts from the U.S. Federal Reserve later this week.
Key Highlights
Spot gold jumped 2.3% to $3,315.09/oz
U.S. gold futures closed 2.4% higher at $3,322.30/oz
The U.S. dollar index slipped 0.1%, supporting gold by making it cheaper for non-dollar investors
Gold is up over 26% year-to-date, repeatedly hitting record highs
The latest uptick in bullion prices comes amid heightened geopolitical and trade tensions. On Sunday, U.S. President Donald Trump announced a 100% tariff on overseas movie productions, rekindling fears of a broader global trade war. This added to investor anxiety and spurred inflows into traditionally safer assets like gold.
Safe-Haven Appeal Intensifies
Jim Wyckoff, senior analyst at Kitco Metals, noted, “We are seeing a continued flow of safe-haven demand, keeping gold prices elevated … prices are going to trade above the $3,000 level at least in the near-term.” The growing uncertainty around trade and monetary policy appears to be reinforcing gold’s role as a hedge against economic instability.
Fed Meeting in Focus
Markets are closely watching the Federal Reserve’s policy meeting, with Chair Jerome Powell’s remarks due Wednesday. While no immediate change in rates is expected—the Fed has kept its benchmark rate steady between 4.25% and 4.50% since December—Powell’s tone could shape future expectations. Analysts suggest this could be the last “unchanged” meeting before external pressures, including inflation and now Trump’s tariffs, potentially alter the central bank’s trajectory.
Broader Precious Metals Market
Gold’s surge lifted silver modestly, with spot silver up 1% to $32.31/oz. Goldman Sachs forecast continued outperformance of gold relative to silver but acknowledged that silver could benefit from gold’s momentum due to correlated investment flows.
Meanwhile, platinum and palladium prices moved in the opposite direction:
Platinum: -0.4% to $956.05/oz
Palladium: -1.5% to $939.55/oz
Outlook
Gold’s impressive performance year-to-date and recent rally suggest that the metal may remain well supported above $3,000 in the near term. Continued dollar softness, ongoing trade tensions, and dovish central bank signals would further strengthen the bullish case. However, any surprise hawkish tilt from the Fed or a de-escalation in trade rhetoric could trigger short-term pullbacks.
Related topics：
- What is the Value of 18K Gold?
- Why Does Gold Price Increase During War?
- What is the Best Price Being Paid for Gold Sovereigns?
