Gold fell as the dollar jumped after President-elect Donald Trump threatened 25% tariffs on imports from Canada and Mexico.

Trump said the import duties were needed to curb migrants and illegal drugs flowing across the U.S. border, while also vowing to impose additional 10% tariffs on Chinese goods. A stronger dollar dented bullion's appeal by making it more expensive for many buyers.

Bullion traded near $2,620 an ounce after dropping 3.4% in the previous session as easing tensions in the Middle East sapped demand for safe-haven assets. Israel's security cabinet is expected to vote on a cease-fire agreement with Lebanon's Hezbollah on Tuesday, and its ratification is considered likely, an Israeli official said.

The precious metal is still up more than 25% this year, supported by central bank buying and the Federal Reserve's shift to interest rate cuts. Many analysts remain positive on the outlook, with Goldman Sachs Group Inc. and UBS sees further gains in 2025.

"Investors are increasingly pricing in an American ‘Golden Age' with pro-market — and pro-crypto — cabinet choices while the U.S. debt and deficit story is being pushed out," said Nicky Shiels, Geneva-based head of metals strategy at MKS PAMP SA. "Gold needs to get back to $2,500, not $3,000, in the short term."

Spot gold fell 0.1% to $2,621.45 an ounce by 8:29 a.m. in Singapore after dropping as much as 0.8% earlier.

The Bloomberg Dollar Spot Index rose 0.5%, after dropping 0.5% in the previous session. Silver, platinum and palladium all fell slightly.

Investors are now focused on the Fed's interest rate meeting next month, with several reports this week that could provide clues about the decision. The data include the central bank's November meeting minutes, consumer confidence and personal consumption expenditures data, the monetary authority's preferred measure of inflation.

Source: Bloomberg