Gold prices fell by nearly 1% on Monday following the U.S. president's decision to delay proposed 50% tariffs on European Union imports. The move alleviated immediate trade tensions and cut investor appetite for gold as a safe place to park money.
Spot gold fell 0.8 percent, to $3,332.04 an ounce in early afternoon trading. U.S. gold futures fell 1% to $3,331.90. This decrease comes on the heels of a strong week last week, where gold saw its best weekly gain in six weeks as a result of previous tariff threats and a weaker dollar.
One analyst called it "range trading" in quiet markets because of public holidays in the U.S. and U.K. The President's decision to delay the tariff deadline to July 9 makes more room for trade talks, which investors perceived as trade risks being temporarily reduced.
Gold prices jumped last week after renewed tariff threats, including the possibility of imposing a 25% duty on iPhones that are sold in the United States but made in other countries. This move away from the threats has caused a small cooling in the gold market.
Despite the recent short-term decline, analysts remain confident that gold will continue to rise. One bank just increased its three-month price target for gold from $3,150 an ounce to $3,500 an ounce. They cited persistent worries about tariffs, increasing geopolitical tensions, and uncertainty about the national budget.
In April, gold imports from Hong Kong to China more than doubled from the previous month. That was the highest level of imports since March 2024 and indicated robust physical demand in the world's biggest gold consumer.
And meanwhile, global tensions persist. Ukraine: Reports over the weekend indicated a third consecutive night of airstrikes in the country. The report came after one of the biggest air raids yet in the war. Events like this can all help drive more investors to gold as a safe alternative during global turmoil.
Other precious metals had a mixed performance. Silver fell 0.3% to $33.38 an ounce. Platinum fell 0.6 percent to $1,088.53, and palladium declined 0.6 percent to $987.27.
Stock markets also reflected caution, with major indexes posting losses. The Dow and S&P 500 dropped more than 0.6%, and the Nasdaq shed about 1%.
