Gold Prices Rise as Trump Threatens Tariff Hike; Weaker Dollar Lends Support

Gold prices climbed on Monday as U.S. President Donald Trump threatened to double tariffs on imported steel and aluminum, while a weaker dollar also supported greenback-priced bullion.

Fundamentals

Spot gold was up 0.6% at $3,309.89 an ounce, as of 0056 GMT. U.S. gold futures also climbed 0.6% to $3,333.30.

The U.S. dollar index edged 0.1% lower, making bullion less expensive for overseas buyers.

Trump said on Friday that he plans to raise tariffs on imported steel and aluminum to 50% from 25%, prompting the European Commission to warn that Europe is prepared to retaliate.

Geopolitical tensions escalated as Ukraine and Russia sharply ramped up the war with one of the biggest drone battles of their conflict, leading to significant events such as a Russian highway bridge being blown up over a passenger train and an ambitious attack on nuclear-capable bombers deep in Siberia.

Gold is considered a safe-haven asset during geopolitical and economic uncertainty.

Meanwhile, Trump and Chinese President Xi Jinping are expected to speak soon to address trade issues, including a dispute over critical minerals, according to Treasury Secretary Scott Bessent on Sunday.

On Friday, the U.S. Personal Consumption Expenditures Price Index saw a year-on-year increase of 2.1% in April, compared to a 2.2% forecast.

Investors now foresee a 50-basis-point rate cut by the U.S. Federal Reserve this year, starting in October.

Fed Governor Christopher Waller stated that interest rate cuts remain possible later this year, even as the Trump administration’s tariff regime is likely to push up price pressures temporarily.

Elsewhere, spot silver rose 0.2% to $33.04 an ounce, platinum was down 0.2% at $1,054.28, and palladium was steady at $970.79.

Data/Events (GMT)

• 0600 – Nationwide House Price MM, YY
• 0750 – HCOB Manufacturing PMI
• 0755 – HCOB Manufacturing PMI
• 0800 – HCOB Manufacturing Final PMI
• 0830 – S&P Global Manufacturing PMI
• 1345 – S&P Global Manufacturing PMI Final
• 1400 – ISM Manufacturing PMI

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