Gold prices edged higher on Tuesday as uncertainty surrounding U.S. President Donald Trump’s tariffs continued to shape market sentiment, reinforcing bullion’s appeal as a safe-haven asset amid fears of a potential global trade war.
In the UAE, gold rates saw an increase, with 24-carat gold rising by AED1.25 to AED350.75. Similarly, 22-carat gold also gained AED1.25, reaching AED326.25. Additionally, 21-carat gold climbed AED1.25 to AED313.00, while 18-carat gold edged up by AED1.00 to AED268.25.
Spot gold was up 0.1 percent at $2,898.99 as of 00:30 GMT. U.S. gold futures gained 0.4 percent to $2,912.60. U.S. Federal Reserve governor Michelle Bowman stated on Monday that she wanted increased conviction that inflation will decline further this year before considering any reduction in interest rates, especially given the uncertainty around the Trump administration’s new trade policies.
Since taking office, Trump has imposed a 10 percent tariff on Chinese imports, announced and delayed 25 percent tariffs on goods from Mexico and non-energy imports from Canada, set a date for 25 percent tariffs on imported steel and aluminum, and plans to impose reciprocal tariffs on all countries taxing U.S. imports. Bullion is regarded as a traditional hedge against rising inflation and geopolitical uncertainties.
Read more: UAE gold prices climb AED1.75, global rates rise as dollar hovers near two-month low
Fed officials’ insights in focus
Fed officials are expected to speak later in the day, providing further insights into the trajectory of monetary policy. Meanwhile, Goldman Sachs has raised its gold price forecast to $3,100 per ounce from $2,890 per ounce for the end of 2025, citing structurally higher central bank demand.
UBS has also updated its gold price forecast, projecting that the yellow metal could reach a high of over $3,200 before stabilizing at elevated levels in the coming years. This adjustment represents an increase from their previous peak prediction, with UBS highlighting several factors that contribute to a more optimistic outlook.
On the geopolitical front, a group of European leaders agreed at a meeting in Paris on Monday to provide Ukraine with security guarantees. However, a European Union official warned that concluding a ceasefire without a peace agreement would be dangerous.
Spot silver fell 1.3 percent to US$32.37 an ounce. Platinum gained 0.5 percent to $980.29, and palladium climbed 1.4 percent to $976.35.
