Gold Holds Strong Despite Dollar Rebound and Trade Uncertainty

Gold prices remained on an upward trajectory in Asian trading on Tuesday, maintaining their strength despite a recent rebound in the U.S. dollar. Uncertainty over trade tariffs and interest rate policies continued to support demand for the precious metal as a safe-haven asset.

Market Drivers

Gold prices found support from geopolitical tensions following a drone strike on a Russian fuel station, raising concerns over a potential escalation in the war with Ukraine. These developments overshadowed recent comments from U.S. President Donald Trump regarding a possible peace treaty.

Additionally, market sentiment was affected by ongoing uncertainty over Trump’s trade tariffs. While the U.S. administration signaled that reciprocal tariffs on trading partners will only be imposed by April, reports indicate that the European Union is considering import controls on certain U.S. goods, increasing concerns over escalating trade tensions.

At the same time, expectations for prolonged high interest rates added to market caution. Federal Reserve Governor Christopher Waller stated that he does not expect Trump’s tariffs to cause a significant increase in inflation but still supports maintaining steady interest rates for an extended period. His comments follow recent U.S. inflation data, which showed a higher-than-expected increase in January.

Gold and Metal Market Performance

Spot gold rose 0.5% to $2,912.81 per ounce, while gold futures for April delivery also gained 0.5%, reaching $2,925.72 per ounce. Despite the dollar’s rebound, demand for gold remained strong, with prices holding close to record highs reached last week.

In other metals, silver futures rose slightly to $32.907 per ounce, while platinum futures remained steady at $1,007.55 per ounce. Copper prices were mixed, with benchmark futures on the London Metal Exchange holding at $9,391.15 per ton, while March copper futures fell 0.1% to $4.5880 per pound due to profit-taking after a strong rally in recent weeks.

Market Outlook

Gold remains well-supported by geopolitical uncertainty, trade policy risks, and Federal Reserve decisions on interest rates. A break above last week’s record high could signal further upside, while a stronger dollar and potential shifts in monetary policy may create resistance. Investors will continue to monitor developments in global trade and U.S. economic data for further market direction.