Gold prices dipped in Asian trading on Monday, extending their decline from all-time highs, as reports indicated that President Donald Trump’s impending April 2 tariff announcement may be less aggressive than initially feared. This has dampened safe-haven demand, even as investors continue to keep a close eye on global economic and geopolitical developments.
Gold Loses Steam as Dollar Eases Losses
Spot gold slipped 0.2% to $3,018.51 an ounce, while May gold futures held steady at $3,049.30 per ounce. Spot prices had soared to a record high of $3,057.50/oz in the previous week, driven by heightened geopolitical risks and concerns over aggressive U.S. trade policy. The slight retreat on Monday was somewhat cushioned by a softer U.S. dollar, which helped limit gold’s downside.
Despite the pullback, gold remained close to its recent highs, buoyed by persistent market uncertainty surrounding U.S. tariffs and the global economic outlook. Broader metal markets also saw marginal gains, with investors weighing supply disruptions and stimulus hopes.
Risk Appetite Improves on Reports of Targeted Trump Tariffs
Wall Street futures jumped on Monday following reports from Bloomberg and The Wall Street Journal suggesting that Trump’s tariffs may be more targeted than originally feared. The reports indicated that Trump is unlikely to impose sweeping tariffs on critical sectors such as automobiles, semiconductors, pharmaceuticals, and commodities.
Instead, the tariffs are expected to be focused on a select group of 15 countries with significant trade imbalances with the United States. While this move still represents a substantial shift in U.S. trade policy, it falls short of the worst-case scenario that had unnerved markets in recent weeks.
“Targeted tariffs will reduce the immediate shock to the global economy and corporate earnings, but we still anticipate heightened volatility as details emerge,” analysts at Vital Knowledge noted.
The moderation in Trump’s tariff stance has buoyed investor risk appetite, pulling capital out of traditional safe havens like gold and into riskier assets such as equities.
Haven Demand for Gold Still Underpinned by Uncertainty
Despite the improvement in sentiment, uncertainty persists. The White House has yet to officially confirm the details of the tariff announcement, leaving room for market surprises. Moreover, Trump’s planned tariffs could still fuel domestic inflation, potentially pressuring the broader U.S. economy.
This ongoing uncertainty has kept a firm floor under gold prices, with investors reluctant to fully unwind their safe-haven positions ahead of the April 2 announcement.
Beyond tariffs, geopolitical tensions continue to support gold. Market participants are closely monitoring ongoing peace negotiations between Russia and Ukraine and rising tensions in the Middle East.
Upcoming U.S. Economic Data in Focus
Traders are also eyeing several key U.S. economic indicators due this week. These include:
- The S&P Global Composite Purchasing Managers’ Index (PMI) for March
- The personal consumption expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge
- A revised fourth-quarter GDP print
The data will provide further insights into the health of the U.S. economy and could influence the Federal Reserve’s future policy path.
Last week, the Fed left interest rates unchanged but flagged ongoing concerns over inflation and softening economic growth. Fed Chair Jerome Powell emphasized that the economy remains “strong overall,” though signs of slowing consumer activity have emerged.
Other Precious Metals Edge Higher
Among other precious metals, platinum futures rose 0.3% to $981.15 per ounce, while silver futures advanced 0.7% to $33.735 per ounce. Both metals had faced some losses in the previous week amid broader market volatility.
Copper Rallies on Supply Concerns and China Stimulus Hopes
Copper prices climbed on Monday, supported by ongoing fears of supply disruptions and optimism surrounding potential stimulus measures in China, the world’s largest consumer of the red metal.
Benchmark copper futures on the London Metal Exchange gained 0.6% to $9,927.90 a ton, while May copper futures rose 0.3% to $5.1305 per pound.
Trump’s threats to impose a 25% tariff on all U.S. copper imports have fueled concerns over tightening supplies in the U.S. physical market. Additionally, reports that several Chinese smelters are considering production cuts to balance margins have intensified worries over reduced global copper supply.
“With smelters signaling possible output cuts and U.S. tariff threats looming, copper markets are bracing for a tighter supply environment,” said Nicolai Sondergaard, a metals analyst at Nansen Research.
The supply-side risks have helped copper build on its strong gains in March, which were largely driven by hopes that China will roll out additional economic stimulus to counterbalance weak growth and bolster demand.
Conclusion: Volatility Persists Amid Mixed Signals
While gold has pulled back slightly from its recent highs, the metal remains well-supported by lingering geopolitical and economic uncertainty. The evolving narrative around Trump’s tariff plans and key upcoming U.S. economic data releases will likely drive market sentiment in the near term.
Meanwhile, industrial metals like copper are drawing support from supply-side concerns and optimism over Chinese policy support, pointing to a potentially volatile but bullish environment for commodities in the weeks ahead.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. The information provided reflects the author’s opinion and should not be construed as financial guidance. Always conduct your own research and consult with a qualified financial advisor before making investment decisions. Trading and investing involve significant risk, including the potential loss of capital.
