Gold prices remained stable on Monday, staying near their recent highs as demand increased due to growing concerns about a slowdown in the U.S. economy and threats of imposing tariffs.
Gold reached record levels last week as demand surged for it as a safe haven following President Trump’s threats to impose additional tariffs. Economic concerns, including weak data on the Purchasing Managers’ Index and U.S. consumer confidence, further supported demand for gold. The decline in the U.S. dollar, driven by expectations of interest rate cuts, also helped boost the prices of other metals.
Amid high inflation, some expect the Federal Reserve to continue its policy of cutting interest rates to support the economy, which leads to a weaker U.S. dollar. With a weaker dollar, gold becomes more attractive as a safe haven, as investors tend to shift to gold to protect their value during times of economic uncertainty, despite the fact that high inflation usually prompts interest rate hikes. The spot gold price rose by 0.1% to reach $2,940.18 per ounce, while April gold futures remained steady at $2,952.97 per ounce.
Demand for gold increased due to concerns over a slowdown in U.S. consumer spending, which has been exacerbated by high inflation, rising interest rates, and Trump’s threats of additional tariffs on several key sectors.
