Trump plans to double steel, aluminum tariffs to 50%
Dollar down 0.6% against its rivals
Russia-Ukraine tensions escalate ahead of peace talks
(Updates prices for EMEA session)
June 2 (Reuters) – Gold prices rose to a more than a one-week high on Monday, driven by safe-haven demand as renewed U.S. tariff threats from President Donald Trump and escalating tensions between Russia and Ukraine heightened global trade and geopolitical fears.
Spot gold was up 2% at $3,353.29 an ounce, as of 1128 GMT, after hitting its highest level since May 23, earlier in the session.
U.S. gold futures rose 1.9% to $3,378.40.
The dollar was down 0.6% against its rivals, after Trump said on Friday that he plans to double duties on imported steel and aluminum to 50%, and as Beijing hit back against accusations that it had violated an agreement on critical minerals shipments.
A weaker dollar makes bullion more appealing for other currency holders.
On Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals.
“I guess risk-off (sentiment) with Asian equities lower is one factor, the other is rising geopolitical tensions – including the escalation in tensions between Ukraine and Russia – (is) lifting demand for safe haven assets such as gold,” said Giovanni Staunovo, UBS analyst.
“Ongoing trade tensions between China and the US are an additional supportive factor for gold.”
On the geopolitical front, Ukraine and Russia ramped up attacks ahead of their second peace talks in Istanbul, including a major Ukrainian strike and a Russian overnight drone assault.
In the U.S., Fed Chair Jerome Powell is set to speak later today, while markets also look forward to speeches from several U.S. Federal Reserve officials this week for signals on the monetary policy outlook.
Gold, widely regarded as a safe-haven asset during periods of geopolitical and economic uncertainty, typically performs well in a low-interest-rate environment.
“The upside (in gold prices) is unlikely to exceed $3,500/oz unless trade tensions escalate further,” said Zain Vawda, analyst at MarketPulse by OANDA.
Spot silver rose 1% to $33.29 an ounce, platinum was down 1% at $1,045.25 and palladium rose 0.6% to $976.31.
(Reporting by Anushree Mukherjee in Bengaluru; Editing by Janane Venkatraman and Shailesh Kuber)
