By Brijesh Patel
(Reuters) – Gold prices rose more than 2% on Monday, helped by a weaker dollar and safe-haven inflows after new tariffs from U.S. President Donald Trump reignited worries about the effects of a global trade war.
Spot gold was up 2.3% at $3,313.21 an ounce, as of 1144 GMT. U.S. gold futures climbed 2.4% to $3,322.
The dollar index was down 0.4% against its rivals, making gold more attractive for other currency holders. [USD/]
On Sunday, Trump announced a 100% tariff on movies produced outside the U.S. but offered little clarity on how the levies would be implemented.
“The U.S. dollar is slowing down and that is a positive for gold, more investors are betting that the Fed will cut rates relatively soon after last week’s U.S. GDP data came below expectation and now with what’s going on with oil,” said Carlo Alberto De Casa, external analyst at Swissquote.
Although the U.S. Federal Reserve is widely expected to leave rates steady on Wednesday, market focus will be on economic projections, clarity on future rate cuts and Chair Jerome Powell’s remarks.
Trump said he will not remove Powell as Fed Board Chairman before his term ends in May 2026, while reiterating his call for the central bank to cut interest rates.
Non-yielding gold acts as a hedge against global uncertainty and inflation and tends to thrive in a low-interest-rate environment.
Trump on Sunday said the U.S. was meeting with many countries, including China, on trade deals, and his main priority with China was to secure a fair trade deal.
“With Chinese solar production now slowing amid oversupply, high U.S. recession risk and central bank gold buying remaining strong in 2025, we expect gold to continue outglittering silver,” Goldman Sachs said in a note.
Elsewhere, spot silver rose 1.3% to $32.38 an ounce, platinum was up 0.1% to $961.41 and palladium gained 0.7% to $960.13.
(Reporting by Brijesh Patel in Bengaluru; Editing by Vijay Kishore and Eileen Soreng)
