Gold experienced a decline on Tuesday, giving up earlier gains as investors took profits amidst renewed trade uncertainty fueled by new tariffs imposed by President Trump and geopolitical risks surrounding US-Iran relations. The strengthening US dollar also contributed to the downward pressure on gold prices.
- Gold fell 1% to around $5,170 per ounce after four days of gains.
- President Trump’s new 10% global tariff took effect. The administration is reportedly considering raising the rate to 15%.
- The EU halted its trade agreement ratification process, and India deferred trade talks with the US.
- US-Iran nuclear talks are set to resume on Thursday, with potential for serious consequences if a deal is not reached.
- The US Dollar is regaining strength, weighing on Gold.
- Markets sold off on Wall Street due to uncertainty over tariffs, geopolitical risks, and upcoming earnings reports.
- Tensions between the US and Iran are ongoing.
- Expectations remain for at least two US Federal Reserve interest rate cuts this year.
- Robust investment demand for gold from India persists despite record high prices.
The confluence of factors suggests a period of volatility for gold. Trade tensions and geopolitical uncertainty provide a backdrop of potential support for the asset as a safe haven. However, a stronger dollar and profit-taking can exert downward pressure. Expectations of interest rate cuts and continued demand indicate a potential cushion against significant declines.