Gold prices slid to their lowest level in three weeks during early Asian trading Monday, as investors exited positions to cover losses elsewhere. Spot gold fell 0.5% to $3,023.10 per ounce—its lowest since March 13.
The retreat follows a series of record highs last week, undermined by rising global uncertainty. Gold futures for June delivery remained stable at $3,039.00 per ounce, suggesting traders are cautiously holding long-term positions despite immediate volatility.
The sell-off comes as a surprise, given gold’s traditional role as a safe-haven asset. But in times of severe cross-asset stress, gold can be liquidated to cover margin calls or cash demands in other sectors, especially equities.
Trump Tariffs Trigger Broader Market Unwind
U.S. President Donald Trump’s sweeping tariff policy, announced on April 2, imposed a blanket 10% levy on all imports, with specific duties reaching up to 49% for goods from China and the European Union.
This aggressive trade posture triggered swift retaliation:
- China slapped 34% tariffs on a wide range of U.S. products
- The European Union hinted at a coordinated trade response
Markets across Asia and Europe reacted sharply, with capital flight from both equities and commodities. The sharp escalation in trade tensions has fueled concerns of a global economic contraction, leading to risk-off positioning across portfolios.
Economic institutions adjusted their forecasts accordingly:
- Goldman Sachs now projects a 45% chance of U.S. recession in 2025, up from 35%
- JPMorgan raised its global recession probability to 60%, up from 40%
In this environment, gold’s decline reflects cross-asset liquidity pressures more than a loss of confidence in the metal itself.
Dollar Weakness Boosts Silver, Copper Resilience
The U.S. Dollar Index slipped 0.5% on Monday, providing some relief to commodities priced in dollars.
Key movements in other metals included:
- Silver futures up 2% to $29.805 per ounce
- Platinum unchanged at $914.35 per ounce
- Copper futures up 1.1% on the London Metal Exchange to $8,846.50 per ton
- U.S. copper futures (May) slightly down 0.3% to $4.4389 per pound
Copper’s mixed performance underscores lingering uncertainty. While a weaker dollar typically supports metals, the risk of a prolonged trade war—especially between the U.S. and China, the world’s top metals consumer—casts a long shadow over future demand.
Investors are bracing for more volatility as geopolitical risk and monetary policy shifts continue to drive price action across metals markets.