Gold advanced, following its biggest one-day decline in two months, on nervousness over President Donald Trump's latest trade threats.

Bullion traded near $2,900 an ounce, after tumbling 1.6% on Friday. The gains on Monday came even after the 14-day relative strength index — a gauge of the pace and intensity of moves — showed the precious metal reached overbought levels in recent sessions.

Market participants are waiting for more insights on Trump's reciprocal tariff plans, which could heighten global trade tensions, said Manav Modi, an analyst at Motilal Oswal Financial Services Ltd. "President Trump kept alive his drumbeat of tariff threats, saying levies on automobiles would be coming as soon as April 2," he said.

Despite the trepidation over what Trump might do next, there is speculation that the tariff threats are mainly being used as a negotiating tool. His administration's trade policies have become increasingly muddled due to delays and exclusions, with geopolitical and economic uncertainties tending to add to bullion's haven appeal.

Traders were also studying the latest US economic data for clues about the Federal Reserve's likely easing path, after a report on Friday showed retail sales slumped by the most in nearly two years. The figures prompted traders to restore bets that the central bank will cut interest rates by September. Lower borrowing costs typically benefit gold, as it doesn't pay interest.

Money managers cut their bullish wagers on gold to a four-week low in the week ending Feb. 11, according to the latest Commodity Futures Trading Commission report on Friday.

Despite Friday's fall, gold still notched its seventh consecutive weekly advance, the longest winning streak since 2020. It's been helped partly by continued buying from central banks including China's, along with rising holdings in bullion-backed exchange-traded funds. Bullion posted an all-time high of $2,942.68 an ounce on Tuesday.

Spot gold rose 0.7% to $2,902.13 an ounce at 10:08 a.m. in London, following a weekly gain of 0.8%. The Bloomberg Dollar Spot Index rose 0.1%. Palladium climbed 1.9%, while silver and platinum also advanced.

Source: Bloomberg