Gold price surges near one-month peak as geopolitical risks mount

[Ben Graham]

Gold prices rallied to a near one-month high on Monday, as a combination of geopolitical risks and economic uncertainty fuelled investor demand for safe-haven assets.

Spot gold surged 2.6% to about $3,377 an ounce by 11:00 a.m. ET, its highest since the first week of May. US gold futures also gained 2.6%, trading at just above $3,400 an ounce in New York.

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Meanwhile, the US dollar fell about 0.6% against other currencies, making bullion less expensive to buyers.

Stocks also fell as renewed Sino-American trade conflicts bubbled and investors braced for a packed week of economic and political cross-currents, including a critical US jobs report.

“The latest tariff threats on Friday, including plans to double steel and aluminum tariffs to 50% along with Ukraine’s weekend attacks deep into Russia, have heightened geopolitical risks and are fuelling risk-off sentiment,” said Peter Grant, vice president and senior metals strategist at Zanier Metals.

Tensions between Washington and Beijing returned to the fore after US President Donald Trump accused China of violating their trade truce. China, however, denied those claims and hit back with accusations of its own.

US Treasury Secretary Scott Bessent on Sunday signalled a possible call soon between Trump and China’s President Xi Jinping to sort out the trade issues.

Investors are also closely watching for comments from Fed Chair Jerome Powell and other policymakers this week for clues on the US rate path.

Between fresh trade war fears, fiscal uncertainty and US debt ceiling concerns, the backdrop is ripe for volatility, Fawad Razaqzada, market analyst at City Index and FOREX.com, said in a note.

“For the gold forecast, this backdrop of risk aversion and fiscal uncertainty couldn’t be more favourable,” he said.

Elsewhere, silver — gold’s sister metal — rallied by more than 4% on rising investor demand for safe havens.