Gold prices increased modestly on Tuesday, staying just below the recent record highs as worries regarding the severity of U.S. President Donald Trump’s proposed trade tariffs eased. However, demand for gold remained relatively strong, driven by uncertainty about the specific tariffs that will be in place by Trump’s April 2 deadline. Investors were also exercising caution ahead of a series of crucial economic reports scheduled for this week.
In the UAE, gold rates declined by AED1.75, with 24-carat gold dropping to AED363.75 and 22-carat gold decreasing to AED336.25. Additionally, 21-carat gold fell AED1.5 to AED322.5, while 18-carat gold slipped AED1.25 to AED276.5.
Gold prices and precious metals retreat from recent peaks
Gold prices, along with other precious metals, have pulled back from their recent highs this week, as risk appetite improved following reports that Trump’s tariffs may be less stringent than initially feared. Nevertheless, a weaker dollar helped to limit larger losses in the metals market, keeping gold prices close to those recent highs.
Spot gold prices rose by 0.1 percent to $3,015.51 per ounce, while gold futures set to expire in May increased by 0.1 percent to $3,048.05 per ounce by 00:59 ET (04:59 GMT). Spot gold prices, which indicate the near-term demand for physical gold, fell sharply from a record high of $3,057.51 per ounce that was achieved last week.
Gold set multiple new records, peaking above $3,055/oz on March 19, driven by inflation fears and geopolitical tensions, remarked Koen Hoorelbeke, Investment and Options strategist, Saxo Bank, to Economy Middle East.
Softer gold prices driven by improving market sentiment
The decline in gold prices was primarily influenced by an improving risk appetite, as Wall Street rebounded significantly from its recent lows. Traders appeared to be increasing their bets that the tariffs set to be announced by Trump on April 2 will exclude critical sectors such as semiconductors, automobiles, and pharmaceuticals. Furthermore, Trump’s reciprocal tariffs are anticipated to target a select group of around 15 countries, which may limit their broader impact.
Despite this, the overall effect and reach of Trump’s policies remain uncertain, which keeps market sentiment biased toward safe-haven assets. Gold prices continue to trade above the notable $3,000 per ounce mark, a level it surpassed earlier in March. This perspective contributed to some gains for the yellow metal on Tuesday.
Read more: UAE gold prices down AED1.75, global rates rise on Fed optimism
Other precious metals also see gains
Other precious metals recorded increases as well, with silver futures climbing 0.7 percent to $33.673 per ounce, while platinum futures stabilized at $967.10 per ounce. Among industrial metals, benchmark copper futures on the London Metal Exchange rose by 0.4 percent to $9,989.60 per ounce, and May copper futures jumped by 0.9 percent to $5.1280 per pound.
Copper prices were driven by rising concerns regarding a potential supply shortage, amid possible U.S. import tariffs and closures of Chinese refineries.
Focus on key U.S. economic data for market cues
The focus this week is firmly on key U.S. economic indicators that may provide further insights into the economy and interest rates. The PCE price index data, which serves as the Federal Reserve’s preferred measure of inflation, will be a significant point of interest this week. This report is due on Friday, with core PCE inflation projected to remain well above the Fed’s annual target of 2 percent.
Before this, a revised report on fourth-quarter gross domestic product is expected on Thursday. This data release comes amid increasing fears of a potential U.S. recession, concerns that have been amplified by the ongoing uncertainty surrounding Trump’s policies.
“Markets remain cautious, particularly around inflation, housing data, Fed speeches, and ongoing tariff developments, with investors closely monitoring any shifts in economic indicators that could signal broader economic headwinds or influence central bank policies,” further noted Hoorelbeke.
