Gold fell slightly from a record as markets digested the latest U.S. trade news from President Donald Trump, who has turned to safe havens amid growing confusion over his tariff agenda.
Bullion fell as much as 0.8% in early trading on Monday — following a more than 6% gain last week that saw it trade above $3,245 an ounce for the first time. The decline came after a modest reprieve for the dollar from its recent rout, following a U.S. pause on reciprocal tariffs on smartphones, computers and other electronics.
However, the recovery stalled after Trump on Sunday signaled separate duties on consumer electronics and microchips were on the cards. A stronger U.S. dollar makes gold more expensive for foreign investors, since it is priced in the currency. The precious metal is up more than 20% so far this year as investors have scrambled for safe havens, with Trump's rapidly evolving trade policies causing major turmoil in stocks, bonds and the U.S. dollar amid fears of a global recession. In particular, the selloff in U.S. Treasury bonds highlights the waning appetite for American assets raising questions about whether sovereign debt remains a safe haven in times of turmoil.
Read More: U.S. Economists Brace for Sharp Slowdown Despite Trump U-Turn
"Gold appears to be the clear beneficiary of the raging debate around the U.S. dollar, and we have seen gold prices in absolute beast mode," Chris Weston, head of research at Pepperstone Group Ltd., said in a note Monday. Some traders say "gold is too hot to sell, but also too overbought to chase," he said. Read More: Brisk Gold Bidding at Daily Auction Drives Latest Surge to Record
Elsewhere this week, traders will be focused on how some of the world's largest central banks are responding to the rapidly changing global outlook, with Singapore and the European Central Bank widely expected to ease monetary policy. Lower interest rates are typically positive for non-interest-bearing bullion. Spot gold fell 0.5% to $3,220.43 an ounce as of 7:37 a.m. in Singapore, after hitting an all-time high of $3,245.48 on Friday. The Bloomberg Dollar Spot Index was steady after a three-day decline. Silver declined, while platinum and palladium rose. (Newsmaker23)
Source: Bloomberg
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