Gold prices fell more than 2% on Monday, with investors turning to the dollar as a safe haven after broad U.S. tariffs raised fears of a global recession.

However, analysts remained bullish on bullion given the challenging economic environment.

Spot gold prices fell 2.4% to $2,963.19 an ounce by 1:36 p.m. ET (1736 GMT), after hitting a near four-week low of $2,955.89 earlier in the session. U.S. gold futures settled 2% lower at $2,973.60.

"Gold prices fell as investors turned to cash and other safe havens such as the Swiss franc and Japanese yen amid market turmoil, which creates the risk of a deeper correction," said Nikos Tzabouras, senior market analyst at Tradu.com.

The dollar strengthened against other major currencies, pulling away from a six-month low hit last week. A stronger U.S. dollar makes gold more expensive for holders of other currencies.

"We're seeing a lot of pressure in the gold market because of liquidity issues and margin calls from speculators," said Bart Melek, head of commodity strategies at TD Securities.

Major stock indexes fell in volatile trading after U.S. President Donald Trump warned of 50% tariffs on China if it does not lift its retaliatory tariffs.

Meanwhile, the White House labeled reports that Trump was considering a 90-day tariff pause for all countries except China as "fake news."

Futures now indicate about a 120 basis point interest rate cut by the U.S. Federal Reserve in December, with markets pricing in about a 37% chance of a U.S. rate cut in May.

Lower interest rates boost bullion's appeal because it bears no interest. Gold, which is seen as a safe haven during times of political and financial uncertainty, hit an all-time high of $3,167.57 on Thursday, boosted by strong haven inflows amid geopolitical uncertainty and strong central bank demand.

Spot silver rose 0.5% to $29.71 an ounce, recovering from a nearly seven-month low hit earlier in the day.

Spot platinum fell 1% to $907.09, while palladium fell 0.9% to $903.19.(Newsmaker23)

Source: Reuters