Gold prices touched a three-week high on Monday, supported by safe-haven demand after US President Donald Trump threatened to impose a 30 percent tariff on imports from the European Union and Mexico.
Spot gold was up 0.2 percent at $3,361.19 per ounce, as of 0134 GMT, after hitting its highest point since June 23 earlier in the session. US gold futures climbed 0.4 percent to $3,376.
“We are seeing safe-haven demand coming back into the picture due to this uncertainty on the implementation of US global trade tariffs policy,” OANDA senior market analyst Kelvin Wong said.
“Near-term outlook looks positive for gold and if gold prices are able to have a daily close above $3,360, it could potentially advance higher towards the next resistance level at $3,435.”
Trump on Saturday threatened to impose a 30 percent tariff on imports from Mexico and the European Union starting on August 1, after weeks of negotiations with the major US trading partners failed to reach a comprehensive trade deal.
Both the European Union and Mexico described the tariffs unfair and disruptive, while the E.U. said it would extend its suspension of countermeasures to US tariffs until early August and continue to press for a negotiated settlement.
Investors now await the US inflation data for June due on Tuesday for more cues on the Federal Reserve’s interest rate path. Markets are currently pricing in just over 50 basis points worth of Fed easing by December.
