Gold Slides as Recession Fears Grow After Trump Tariffs

Gold prices fell to a three-week low in Asian trading on Monday as investors liquidated positions to offset losses in other markets amid escalating global trade tensions and growing concerns about a potential global recession.

As of 02:12 ET (06:12 GMT), spot gold dropped 0.5%, trading at $3,023.10 per ounce, marking its lowest level since March 13.

Despite hitting consecutive record highs last week, gold prices retreated following President Donald Trump’s tariff announcement.

Gold futures for June delivery were largely unchanged at $3,039.00 per ounce on Monday.

Gold Slides as Recession Fears Grow After Trump Tariffs

The decline in gold, traditionally considered a safe-haven asset, comes amid broader risk-off sentiment as traders weighed the potential consequences of the sweeping tariffs announced by U.S. President Donald Trump.

On April 2, Trump imposed a blanket 10% tariff on all imports, alongside higher, targeted duties of up to 49% on goods from key trading partners, including China and the European Union.

This move has unsettled global markets, with China retaliating by imposing a 34% tariff on a wide range of U.S. imports, while the European Union indicated a coordinated response. The escalating trade war has sparked fears of a severe slowdown in global growth.

Goldman Sachs raised its forecast for a 2025 recession to 45%, up from 35% just a week earlier, while JPMorgan increased its estimate for the likelihood of a global recession this year to 60%, up from a previous 40%.

“Even gold, traditionally a safe haven, tumbled from a record high it reached earlier last week as investors sold off the precious metal alongside other asset classes to cover losses elsewhere,” ING analysts noted in a report.

Dollar Weakness and Fed Rate Cuts Offer Some Support to Gold

Despite the broader decline in gold, continued weakness in the U.S. dollar and growing expectations of Federal Reserve interest rate cuts provided some support to the precious metal, as its losses were comparatively smaller than those seen in other financial markets.

The U.S. Dollar Index fell 0.5% in Asian trading on Monday, boosting gains in some precious metals.

Silver futures surged 2% to $29.805 per ounce, while platinum futures remained largely unchanged at $914.35 per ounce.

Copper Rises on Weak Dollar, Trade Concerns Persist

Copper prices rebounded on Friday after a weekly loss, as the weaker U.S. dollar provided some relief, although concerns over tariffs continued to weigh on the market.

“A global trade war is bearish for industrial metals, especially in the context of slowing global growth. China, the world’s largest consumer of industrial metals, is particularly impacted by a trade conflict with the U.S.,” ING analysts added.

Benchmark copper futures on the London Metal Exchange climbed 1.1% to $8,846.50 per ton, while copper futures for May delivery edged 0.3% lower to $4.4389 per pound.