Gold fell below $3,360 per ounce on Tuesday, pulling back from a near four-week high, as a slight bounce in the US dollar weighed on the metal. The precious metal had surged 2.8% on Monday, marking its biggest one-day gain since early May, as investors sought safe-haven assets amid escalating trade and geopolitical tensions.
Gold eases on slightly firmer dollar
The market’s spike came in response to US President Donald Trump’s Friday announcement that tariffs on steel and aluminum imports would double starting Wednesday, intensifying strains with key trade partners and adding to global economic uncertainty.
Simultaneously, tensions between Washington and Beijing escalated sharply after both sides accused each other of violating the temporary trade deal, fueling fears of a protracted trade war with broader implications for global markets. Against this backdrop, market participants are now focused on the prospect of a potential phone call between President Trump and Chinese President Xi Jinping, which the White House has confirmed is likely to occur later this week. Investors hope that such high-level dialogue might ease tensions and provide some clarity on the future of US-China trade relations.
Geopolitical risk remains high
Meanwhile, geopolitical risk also remained elevated due to the ongoing conflict between Russia and Ukraine. The two sides held their second round of direct peace talks on Monday, following a significant escalation in hostilities earlier in the week. Despite the diplomatic engagement, the talks failed to yield substantial progress toward ending the conflict, leaving uncertainty high and contributing to gold’s appeal as a safe-haven asset.
The combination of trade tensions, geopolitical uncertainty, and fluctuating currency markets continues to drive volatility in gold prices. While the metal remains attractive during periods of heightened risk, the recent rebound in the US dollar on Tuesday applied downward pressure, prompting the temporary pullback from recent highs. Traders will be closely watching developments on multiple fronts—including trade negotiations, geopolitical events, and US economic data—to gauge the next direction for gold in the weeks ahead.
