Gold Prices Hold Near Record Highs Amid U.S. Economic, Tariff Concerns

Gold prices traded flat-to-lower on Monday, remaining close to recent record highs, as safe-haven demand surged amid growing uncertainty over the U.S. economy and potential trade tariffs.

Key Market Moves

• Spot gold rose 0.1% to $2,940.18 per ounce, while April gold futures remained flat at $2,952.97 per ounce (as of 05:37 GMT).
• Gold hit a record high of $2,954.97 last week, driven by strong haven demand and falling risk appetite in financial markets.

Drivers of Gold’s Strength

1. Economic Slowdown Concerns
   • Weak U.S. data reinforced fears of slowing private spending:
     • U.S. Services PMI fell below expectations.
     • Consumer sentiment weakened, dropping to a 15-month low.
     • Retail sales data indicated softening demand in January.
   • Sticky inflation and high interest rates are adding pressure to the U.S. economy.
2. Trade Tariff Jitters
   • Gold demand increased after U.S. President Donald Trump threatened new tariffs on key sectors.
   • Investors fear retaliatory tariffs from major U.S. trading partners, which could disrupt markets.
3. Dollar Weakness Supporting Gold
   • The U.S. dollar slipped as markets priced in potential Fed rate cuts in response to economic softening.
   • A weaker dollar typically boosts gold prices, making it more attractive for foreign investors.

Market Outlook

Gold’s trajectory will likely depend on:

• Further U.S. economic data releases, particularly inflation and employment figures.
• Fed rate expectations, as investors assess the likelihood of more cuts in 2025.
• Global trade tensions, especially developments around U.S. tariffs.

For now, gold remains well-supported near record highs as investors seek safety amid economic and geopolitical uncertainties.