Gold Edges Lower Amid Profit-Taking, But Geopolitical Tensions and Trade Uncertainty Keep Prices Elevated

Gold prices slipped in Asian trade on Tuesday as traders booked profits after a strong rally fueled by renewed geopolitical risks and persistent trade tensions. The yellow metal had surged over 2% on Monday, buoyed by heightened uncertainty surrounding the Russia-Ukraine war, U.S.-Iran nuclear talks, and ongoing concerns about U.S. trade tariffs.

Spot gold fell 0.6% to $3,361.24 an ounce, while August gold futures dipped 0.4% to $3,384.92/oz by 00:32 ET (04:32 GMT). Despite the pullback, bullion retained the bulk of its recent gains as geopolitical and economic risks remained front and center for investors.

Geopolitical Flashpoints Fuel Haven Demand

Gold’s rally on Monday was driven by a series of escalating tensions. Ukraine’s deadly drone strike on Russia undermined fragile peace talks, while Moscow showed little inclination to agree to a lasting ceasefire. In the Middle East, U.S.-Iran nuclear negotiations appeared to falter, with President Donald Trump reiterating his stance that Tehran would not be permitted to enrich uranium—raising fears of further destabilization in the region. Market anxiety was further stoked by reports that Israel could attack Iran if talks with the U.S. collapse.

These global flashpoints, coupled with worries over Trump’s proposed higher trade tariffs and strained relations with China, kept safe-haven demand for gold elevated.

Dollar Recovery Caps Gains, Bond Market Jitters Linger

Gold faced near-term pressure on Tuesday as the U.S. dollar edged up from six-week lows, driven by a mild recovery in U.S. Treasury yields. However, concerns over America’s fiscal health, mounting debt levels, and the passage of a controversial tax cut bill in Congress continued to weigh on broader risk sentiment.

Profit-taking also contributed to the decline in gold, while other precious metals followed suit. Platinum futures fell 0.3% to $1,061.20/oz, and silver futures dropped 1.1% to $34.323/oz.

Copper Slips on Weak Chinese Data

Industrial metals saw mixed performance, with copper prices notably under pressure after weak Chinese manufacturing data. The Caixin PMI showed an unexpected and sharp contraction in May, echoing the government’s own PMI reading and raising fears over slowing industrial demand in the world’s largest copper consumer.

London copper futures fell 0.5% to $9,550.20 a ton, while U.S. copper futures slid 2.5% to $4.7345 a pound.

Traders remain cautious as global economic uncertainty, trade policy risks, and fragile geopolitical landscapes continue to drive volatility across commodities markets.