Gold prices rose to a three-week high on Monday, supported by growing safe-haven demand after U.S. President Donald Trump threatened steep tariffs on imports from the European Union and Mexico. The move fueled market uncertainty, prompting investors to shift into precious metals.
U.S. gold futures rose 0.36% to $3,375.90.
Trump’s announcement over the weekend of a 30% tariff on most goods from the EU and Mexico, effective August 1, has drawn criticism from both trading partners. While calling the measures unfair and harmful, the EU confirmed it would extend its suspension of retaliatory tariffs until early August, in hopes of reaching a negotiated settlement.
Attention now shifts to upcoming U.S. inflation data, including the consumer and producer price indexes, which could influence the Federal Reserve’s policy direction. Markets are currently pricing in two rate cuts—totaling 50 basis points—by the end of the year, with the first expected in October. Lower interest rates tend to support gold by reducing the opportunity cost of holding non-yielding assets.
Silver also surged, jumping 1.5% to $38.89 per ounce - its highest level since September 2011. Analysts attributed the rally to speculative momentum and strong technical signals.