Gold rose after its biggest daily surge in four weeks as a weaker dollar and stronger demand for safe-haven assets bolstered trade and geopolitical risks.

Bullion prices were near $3,390 an ounce after jumping 2.8% on Monday as relations between Washington and Beijing deteriorated and the Russia-Ukraine war escalated. China accused the U.S. of violating their latest trade deal and vowed to take action to defend its interests, even as the White House later confirmed the countries' leaders would likely speak this week.

Meanwhile, the European Union issued a fresh warning of retaliatory action if President Donald Trump follows through on his tariff threats.

With little sign of a breakthrough in negotiations on the horizon, the latest developments have dented optimism that the U.S. is moving toward a deal with America's two largest trading partners. The U.S. dollar fell to its lowest level since 2023, reflecting growing concerns over Trump's policies and their impact on the economy.

All of that underscores gold's appeal as a safe haven, which has waned since hitting a record high above $3,500 an ounce in April. The metal is still up more than a quarter this year, with Goldman Sachs Group Inc. saying last week that it would remain a hedge against inflation in long-term portfolios, along with oil.

Spot gold rose 0.2% to $3,389.61 an ounce as of 7:23 a.m. in Singapore. The Bloomberg Dollar Spot Index was steady, after falling 0.6% on Monday. Silver was flat, after hitting its highest since October. Platinum rose slightly, and palladium was little changed. Looking ahead, there are a slew of U.S. labor market indicators due this week, including the May jobs report, which will help guide Federal Reserve monetary policy. Lower interest rates are usually positive for non-yielding bullion.

Source: Bloomberg