Gold prices increased on Tuesday, driven by escalating global trade tensions between the United States and its major partners, along with a weakening US dollar.
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Spot gold rose by 0.8% to $3,005.21 per ounce at 08:47 GMT, after hitting its lowest level since March 13 on Monday. US gold futures also climbed 1.6% to $3,020.70.
Spot gold remains up nearly 15% since the beginning of the year, supported by geopolitical and economic uncertainty, rising demand from central banks, and increased inflows into gold-backed exchange-traded funds (ETFs).
Zen Foda, an analyst at MarketPulse, a division of OANDA, stated: "Gold is seeing a rebound driven by the weakness of the US dollar and continued uncertainty surrounding the developments of the trade war."
The US Dollar Index (.DXY) has fallen, making dollar-denominated gold cheaper for buyers outside the United States.
China Rejects US "Extortion"
China has refused to bow to what it described as "extortion" by the United States amid the escalating trade war sparked by President Donald Trump’s imposition of comprehensive tariffs, with no signs of de-escalation. The European Commission also offered a "zero-for-zero" tariff deal, while responding by imposing 25% tariffs on some US imports.
Foda added: "If tariffs continue to create uncertainty alongside expectations of further interest rate cuts, this could pave the way for a new upward surge in gold prices."
Markets are expected to closely monitor the minutes of the latest US Federal Reserve meeting, set to be released on Wednesday. Traders expect a 97 basis point rate cut by the end of the year, with a 40% chance of the cut beginning in May. Gold, which does not yield returns, tends to perform well in a low-interest-rate environment.
Ricardo Evangelista, senior analyst at ActivTrades, said: "The $3,000 level is a very important psychological level, so it’s acting as a support point right now... and if it breaks through the resistance level at $3,050, I believe it will reach $3,100."
Prices of Other Precious Metals
Silver (Spot) rose by 0.4% to $30.24 per ounce
Platinum increased by 1.1% to $923.10
Palladium gained by 0.1% to $919.78
