Gold pulls back from highs as tariff relief eases safe-haven demand
Press Hub UCapital
Share:
Gold prices retreated modestly on Monday after surging to a new all-time high of $3,245.42/oz in early trading, as markets responded to a temporary easing in trade tensions. Spot gold was last quoted at $3,232.49/oz (-0.13%) at 07:02 GMT, while U.S. gold futures edged +0.1% to $3,248.30/oz. The price action reflects a short-term cooling of safe-haven flows following President Trump’s tariff exemptions on smartphones and computers, which dampened risk aversion and improved equity sentiment globally.
The move comes after a volatile session on Friday where gold decisively broke above the psychologically and technically significant $3,200 threshold for the first time, supported by geopolitical tension, a weakening U.S. dollar, and broad market stress. However, the White House's recalibrated stance on tech product tariffs introduced a new round of policy ambiguity, reducing immediate hedging demand and creating short-term directional uncertainty, according to Tim Waterer, Chief Market Analyst at KCM Trade.
Despite today’s pullback, market expectations for continued U.S. dollar softness and elevated geopolitical risk keep the upside scenario intact. Waterer noted that gold could "eye off a run towards $3,300/oz in the near term" should macro uncertainty persist and USD real yields continue to decline.
Adding to the bullish structural case, Goldman Sachs revised its 2025 year-end forecast to $3,700/oz (up from $3,300), citing stronger-than-anticipated central bank purchases and rising ETF inflows. The broader rate environment remains favorable: traders currently price in ~80 basis points of Fed rate cuts by end-2025, which supports demand for non-yielding assets like bullion.
In China, the price premium for gold widened last week, driven by increased investor demand as households and institutions seek protection from heightened U.S.-China trade tensions. This regional divergence further underscores gold’s appeal as a geopolitical and currency hedge across both Western and emerging markets.
In the broader precious metals complex, spot silver (XAGUSD1!) declined 0.6% to $32.06/oz, consolidating after last week's gains. Platinum (PL1!) rose 1.0% to $952.50/oz, and palladium (XPDUSD1!) advanced 1.3% to $927.25/oz, benefitting from improved industrial sentiment and easing fears of immediate supply chain disruption due to trade risks.
Conclusion: While the short-term pullback reflects a marginal shift in risk appetite following tariff adjustments, the macro backdrop for gold remains structurally supportive, with central bank demand, weaker real rates, and trade-induced volatility likely to underpin price resilience. Key technical levels to monitor include support at $3,200 and resistance near $3,300, with directional bias tied to Fed commentary, U.S.-China trade headlines, and upcoming inflation data.
The move comes after a volatile session on Friday where gold decisively broke above the psychologically and technically significant $3,200 threshold for the first time, supported by geopolitical tension, a weakening U.S. dollar, and broad market stress. However, the White House's recalibrated stance on tech product tariffs introduced a new round of policy ambiguity, reducing immediate hedging demand and creating short-term directional uncertainty, according to Tim Waterer, Chief Market Analyst at KCM Trade.
Despite today’s pullback, market expectations for continued U.S. dollar softness and elevated geopolitical risk keep the upside scenario intact. Waterer noted that gold could "eye off a run towards $3,300/oz in the near term" should macro uncertainty persist and USD real yields continue to decline.
Adding to the bullish structural case, Goldman Sachs revised its 2025 year-end forecast to $3,700/oz (up from $3,300), citing stronger-than-anticipated central bank purchases and rising ETF inflows. The broader rate environment remains favorable: traders currently price in ~80 basis points of Fed rate cuts by end-2025, which supports demand for non-yielding assets like bullion.
In China, the price premium for gold widened last week, driven by increased investor demand as households and institutions seek protection from heightened U.S.-China trade tensions. This regional divergence further underscores gold’s appeal as a geopolitical and currency hedge across both Western and emerging markets.
In the broader precious metals complex, spot silver (XAGUSD1!) declined 0.6% to $32.06/oz, consolidating after last week's gains. Platinum (PL1!) rose 1.0% to $952.50/oz, and palladium (XPDUSD1!) advanced 1.3% to $927.25/oz, benefitting from improved industrial sentiment and easing fears of immediate supply chain disruption due to trade risks.
Conclusion: While the short-term pullback reflects a marginal shift in risk appetite following tariff adjustments, the macro backdrop for gold remains structurally supportive, with central bank demand, weaker real rates, and trade-induced volatility likely to underpin price resilience. Key technical levels to monitor include support at $3,200 and resistance near $3,300, with directional bias tied to Fed commentary, U.S.-China trade headlines, and upcoming inflation data.