Gold rose to a three-week high on Monday, boosted by safe-haven demand after U.S. President Donald Trump threatened tariffs on the European Union and Mexico, while silver hit a nearly 14-year high.

Spot gold rose 0.4% to $3,369.89 an ounce, as of 11:23 GMT, after hitting its highest level since June 23 earlier in the session. U.S. gold futures rose 0.5% to $3,381.10. Trump said on Saturday that he would impose 30% tariffs on most imports from the European Union and Mexico starting August 1, adding similar warnings to other countries.

The European Union and Mexico described the tariffs as unfair and disruptive, while the EU said it would extend the suspension of retaliatory measures against U.S. tariffs until early August and continue to press for a negotiated settlement. "Trump's tariff threats are supporting demand for safe-haven assets, and gold is a key beneficiary of this," said UBS commodities analyst Giovanni Staunovo.

Data-wise, traders are looking to this week's US consumer price index and producer price index data for clues on the Federal Reserve's interest rate direction. Investors are currently anticipating a 50 basis point Fed rate cut by the end of this year, starting in October. Gold tends to thrive in low interest rates.

Meanwhile, Indian investors, traditionally obsessed with hoarding gold, are increasingly turning to silver, as its yields this year have outpaced those of gold.

Spot silver rose 1.6% to $38.96 an ounce after hitting its highest level since September 2011 earlier in the trading session. Silver's rally "is driven by speculative flows, with the precious metal moving above technical resistance levels," Staunovo said. ANZ, in a note, said that silver breaking through the $35–$37 range could potentially trigger fresh technical buying and push prices towards $40.

Platinum fell 1.4% to $1,379.53. Palladium rose 1.3% to $1,230.32, its highest level since late October 2024. (alg)

Source: Reuters