Gold prices strengthened on Monday following a significant milestone reached recently, driven by geopolitical tensions, concerns over trade tariffs increasing trade disputes, and mounting expectations of interest rate cuts from the U.S. Federal Reserve which have continued to boost demand for safe-haven assets.
The price of spot gold increased by 0.1% to $2,986.53 per ounce as of 0307 GMT. Last Friday, the bullion surpassed the $3,000/oz mark to achieve a record high of $3,004.86.
U.S. gold futures dipped by 0.2% to $2,994.60.
Kelvin Wong, an Asia Pacific senior market analyst at OANDA, mentioned that the recent gold rally was fueled by fears of stagflation. Wong also noted that short-term momentum appears positive with potential resistance levels at $3,016 or $3,030.
Treasury Secretary Scott Bessent acknowledged on Sunday that there is no certainty that a recession will not occur in the U.S., although there might be adjustments necessary.
In March, U.S. consumer sentiment saw a sharp decline to near a 2.5-year low, while inflation expectations surged due to concerns surrounding President Donald Trump's extensive tariffs potentially escalating prices and negatively impacting the economy.
Persistent geopolitical tensions were highlighted, such as the U.S.'s commitment to targeting Yemen's Houthis until they cease attacks on shipping and Israeli military actions resulting in the deaths of at least 15 Palestinians in the Gaza Strip over the past day.
Gold, recognized as a hedge against political uncertainties and inflation, has experienced an approximately 14% increase year-to-date in 2025.
Investors are now looking forward to the upcoming monetary policy meeting of the Fed on Wednesday, and subsequent speeches by Fed Chair Jerome Powell.
Kelvin Wong suggested that any upward revisions in the inflation forecast and indications from Powell during the press conference about potential economic uncertainties arising from trade tariff policies could support higher gold prices.
The price of spot silver decreased by 0.1% to $33.76 per ounce, with platinum rising by 0.1% to $994.50, and palladium dropping by 0.1% to $963.83.