The Gold Price (XAU/USD) drifts higher to near $3,350 during the early Asian session on Monday after facing some profit-taking due to the long weekend. Uncertainty about US President Donald Trump's tariff policies and persistent geopolitical tensions continue to underpin the precious metal.

Investors have rushed to safe-haven assets like Gold due to rising uncertainty about tariffs and their impact on the economy, resulting in a more than 25% increase in the yellow metal prices since January. "The case for adding gold allocations has become more compelling than ever in this environment of escalating tariff uncertainty, weaker growth, higher inflation, geopolitical risks & diversification away from US assets & the US$," said UBS analysts.

Additionally, central bankers have been adding gold to their portfolios. China, the world's largest gold consumer, China added gold to its holdings for the fifth consecutive month, boosting its demand for the precious metal as a safe haven asset in the face of mounting global trade and geopolitical tensions.
On the other hand, the Federal Reserve (Fed) Chair Jerome Powell turned hawkish last week, reducing the likelihood of a Fed rate reduction in June. Meanwhile, San Francisco Fed President Mary Daly said on Friday that the US economy is in a good place, though some sectors are slowing down. This, in turn, could lift the Greenback and weigh on the USD-denominated commodity price.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal

Source: Fxstreet