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Gold prices dipped in Asian trading on Monday, shedding last week’s sharp gains as the U.S. dollar strengthened following President Donald Trump’s temporary imposition of tariffs on Colombian imports. Investors remained cautious ahead of the Federal Reserve’s interest rate decision this week, further pressuring the yellow metal.
Gold Market Performance
- Spot Gold: Declined 0.7% to $2,752.09 per ounce.
- Gold Futures (February): Fell 0.8% to $2,783.22 an ounce by 01:21 ET (06:21 GMT).
Gold had rallied nearly 3% last week amid Trump’s demands for rate cuts and expectations of a gradual imposition of tariffs. However, the metal is retreating as the dollar regains strength.
Key Factors Driving Gold Prices
- Stronger U.S. Dollar:
- The U.S. Dollar Index rose 0.3% in Asian trading after its worst weekly decline in two months. A stronger dollar makes gold more expensive for buyers using other currencies, contributing to the metal’s decline.
- Trump’s Tariff Impact:
- Trump imposed a 25% tariff on Colombian imports after a diplomatic standoff over deportation flights.
- Although Colombia’s President Gustavo Petro proposed an interim solution, easing the tension, the uncertainty boosted the dollar, indirectly weighing on gold.
- Federal Reserve Meeting:
- Markets are anticipating the Fed will hold interest rates steady during its two-day meeting ending Wednesday.
- Projections for the first rate cut in 2025 are set for June, according to CME FedWatch.
- Gold typically weakens with higher interest rates as it competes with interest-bearing assets.
Other Precious Metals
The strength of the dollar also weighed on other precious metals:
- Platinum Futures: Dropped 1.1% to $961.20 an ounce.
- Silver Futures: Declined 1.7% to $30.655 an ounce.
Copper Retreats from Two-Month High
Copper prices also fell on Monday as the dollar rebounded and market uncertainty lingered over Trump’s tariff policies.
- London Metal Exchange Copper Futures: Down 0.5% to $9,230.50 per ton.
- February Copper Futures: Fell 1.1% to $4.275 a pound.
Copper had reached a two-month high on Friday, supported by Trump’s softer tone toward Chinese tariffs. However, the rebound in the dollar and concerns over the durability of Trump’s trade policies have pressured the red metal.
Outlook
Gold and other precious metals face short-term headwinds as investors await clarity on U.S. monetary policy and geopolitical developments. A steady Fed stance and a stronger dollar are likely to keep gold prices under pressure, while ongoing tariff uncertainty may contribute to further market volatility.
