Gold Prices Slip Amid Trade War Fears and Stronger U.S. Dollar
Gold prices edged lower on Monday after hitting record highs last week, pressured by a strengthening U.S. dollar and concerns over global trade tensions. Spot gold dipped 0.2% to $2,796.09 per ounce by 0825 GMT, following a historic peak of $2,817.23 on Friday. U.S. gold futures also fell 0.2% to $2,830.80.
The decline comes despite expectations that tariff-induced economic uncertainty would typically drive safe-haven demand for gold. Analysts attributed the slide to the dollar’s surge and diminishing prospects for further interest rate cuts. U.S. President Donald Trump’s new tariffs—25% on imports from Canada and Mexico and 10% on Chinese goods starting February 4—sparked global retaliation, with Canada, Mexico, and China pledging countermeasures.
Despite the immediate dip, experts remain optimistic about gold’s longer-term performance. City Index analyst Matt Simpson expects gold to rebound amid inflation concerns and ongoing trade disputes. Citi forecasts that an escalation in tariffs could push gold prices to $3,000 per ounce, while J.P. Morgan warned of short-term bearish pressure from equities but maintained a bullish medium-term outlook for bullion.
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