Gold prices climbed on Monday as geopolitical tensions and renewed trade policy concerns heightened investor demand for safe-haven assets.
Spot gold advanced by 0.8% to $3,314.36 an ounce as of 5:52 a.m. in Nigeria, reversing part of last week’s 2% decline.
The upward movement in bullion was driven by a combination of heightened military activity in Eastern Europe and signals of a more aggressive trade posture from the United States.
Over the weekend, Ukraine carried out a series of drone strikes targeting military airfields deep within Russian territory, including regions in eastern Siberia.
Concurrently, Moscow launched one of its most prolonged assaults on Kyiv in recent months, adding to instability ahead of scheduled peace negotiations.
The increased geopolitical risk has revived the appeal of gold as a hedge against market volatility and global conflict. The metal’s movement came alongside a modest dip in the Bloomberg Dollar Spot Index, further supporting bullion’s gain.
In addition to geopolitical factors, market sentiment was affected by renewed trade friction following comments by former U.S. President Donald Trump.
Trump pledged to raise tariffs on foreign steel and aluminum imports to 50%, up from the current 25%, signaling a potential re-escalation of trade barriers if re-elected.
Canada’s industry minister responded by indicating that retaliatory measures would be considered if U.S. tariff policy becomes more restrictive.
There are also growing concerns regarding the stability of the U.S.-China trade relationship. Trump accused Beijing of walking back on commitments agreed to in recent trade negotiations, raising doubts over the durability of the existing truce between the world’s two largest economies.
Despite recent pullbacks, gold has posted a year-to-date increase of over 25%, supported by persistent inflationary pressures and ongoing global economic uncertainty.
Analysts at Goldman Sachs Group Inc. last week reaffirmed their outlook that gold remains a core component of long-term inflation-hedging strategies, particularly in conjunction with oil.
While silver prices edged higher in line with gold, platinum and palladium recorded slight declines. Broader investor sentiment remains cautious ahead of key macroeconomic indicators due later in the week.
The U.S. labor market report for May, scheduled for release on Friday, is expected to provide clearer direction on the Federal Reserve’s policy stance in the coming months.
Gold’s renewed momentum underscores the metal’s role as a stabilizing asset amid intensifying global risk. Market participants will continue to monitor geopolitical developments, trade policy signals and U.S. economic data for further cues.
