Gold prices rebounded on Monday to trade above $2,860 an ounce as escalating US tariff threats stoked fears of an economic slowdown and forced investors to seek safety in the precious metal.
The rebound comes after gold recorded its first weekly loss of 2025 when it dipped by 2.7% as some traders booked profits following a record-breaking start to the year.
Spot gold rose 0.2% to $2,862.61 an ounce at 7:16 a.m. in London, buoyed by concerns that the US economy may face further strain as President Donald Trump prepares to impose new levies on key trade partners.
Trump is reportedly set to enforce 25% tariffs on Canada and Mexico as early as this week and plans to double existing tariffs on China.
Investors’ concerns about the economy have also heightened expectations of interest rate cuts by the Federal Reserve, which could further enhance gold’s appeal as a non-yielding asset.
“The upcoming US payrolls report is poised to shed light on the health of the employment market,” said Priyanka Sachdeva, analyst at Phillip Nova Pte Ltd. “Weak figures could prompt the Federal Reserve to consider rate cuts, further supporting gold prices.”
Meanwhile, the dollar eased 0.2% as investors weighed the impact of Trump’s proposed tariffs, which threaten to keep inflation elevated.
A stronger dollar makes gold more expensive for holders of other currencies but Monday’s dip offered some respite for gold prices.
Recent US data has fueled concerns that the country may be entering a period of stagflation—characterized by slow growth and high inflation—which could further bolster demand for gold as a store of value.
With uncertainties looming, investors are increasingly turning to gold as a hedge against both economic slowdown and rising inflation risks.
As global markets brace for the fallout from US tariff moves, gold’s haven status is expected to remain a key driver of its price trajectory in the weeks ahead.
