Gold prices rose in Asian trade on Tuesday, remaining upbeat despite a recent rebound in the dollar as haven demand remained underpinned by uncertainty over U.S. trade tariffs and interest rates.
A drone strike on a Russian fuel station ramped up concerns over an escalation in the war with Ukraine, undermining recent comments from U.S. President Donald Trump on a potential peace treaty.
Gold was also undeterred by an overnight rebound in the dollar, with spot prices remaining about $40 away from a record high hit last week.
Spot gold rose 0.5% to $2,912.81 an ounce, while gold futures expiring in April rose 0.5% to $2,925.72 an ounce by 00:45 ET (05:45 GMT).
But broader metal prices came under pressure from a stronger dollar.
Tariff jitters, rate uncertainty persists
Safe haven demand remained underpinned by continued uncertainty over Trump’s plans for trade tariffs, even as the U.S. President signaled that his reciprocal tariffs on U.S. trading partners will only be imposed by April.
But reports over the weekend showed the European Union was considering import controls on certain U.S. goods- a move that could mark an escalation in trade tensions with the U.S.
Trump had last week imposed 25% tariffs on all imports of steel and aluminum, ramping up concerns over retaliatory measures from other countries.
Additionally, markets remained on edge over U.S. interest rates remaining high for longer. Federal Reserve Governor Christopher Waller said on Tuesday that while he did not see Trump’s tariffs causing a major spike in inflation, he still supported keeping interest rates steady for longer.
Waller’s comments come after data last week showed U.S. inflation grew more than expected in January.
The dollar rebounded from recent losses on Tuesday, pressuring broader metal markets.
Platinum futures steadied at $1,007.55 an ounce, while silver futures rose slightly to $32.907 an ounce.
Among industrial metals, benchmark copper futures on the London Metal Exchange steadied at $9,391.15 a ton, while March copper futures fell 0.1% to $4.5880 a pound. Copper prices were hit with some profit-taking in recent sessions after a strong run-up since late-January.
Goldman Sachs sees gold at $3,100 by end-2025
Goldman Sachs on Monday hiked its year-end price forecast for gold to $3,100 an ounce from $2,890 an ounce, citing increased central bank demand.
The investment bank said that higher central bank demand will add 9% to gold prices by end-2025. The gain will also include higher ETF holdings, as global interest rates fall.
This should help the yellow metal weather softer safe haven demand, especially if uncertainty over U.S. policies clears.
But if policy uncertainty, especially tariff fears, persist in the coming months, GS sees gold surging as high as $3,300 an ounce by end-2025.
Several global central banks, specifically those in emerging markets, have increased their gold buying over the past year on rising uncertainty over U.S. policies and strength in the dollar.
