Gold price volatility is back in focus as the keyword “trade tariff impact” continues to shake investor confidence. On Monday, gold prices retreated slightly from record highs. This dip came as the U.S. signaled partial relief from strict trade tariffs on Chinese imports. However, ongoing tensions between Washington and Beijing kept markets cautious.
Mild Recovery in Risk Appetite
Markets responded positively to news that the U.S. would exclude electronic goods from the recently announced 145% tariffs on Chinese imports. This move temporarily boosted investor sentiment. Asian stocks rose, and U.S. index futures gained ground during early trading hours in Asia. Major American firms like Apple, heavily dependent on Chinese imports, saw some relief.
However, President Trump quickly tempered this optimism. He stated that electronic goods would still face a 20% levy and hinted at more import tariffs soon. His comments injected renewed uncertainty into the market.
Gold Holds Strong Despite Decline
Despite Monday’s slight dip, gold remained above the $3,200 level. Spot gold dropped 0.3% to $3,225.79 per ounce. June futures slipped 0.1% to $3,240.87. Prices hovered just below last week’s all-time high of $3,245.69 per ounce.
This minor pullback came as risk-driven assets gained traction. Still, weakness in the U.S. dollar and bond yields helped keep gold supported. Additionally, recent dovish signals from the Federal Reserve added to the bullish outlook for the yellow metal.
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Trade War Risks Remain High
Although markets saw brief relief, the trade war narrative remains strong. China responded to U.S. tariff hikes with retaliatory duties of up to 125%. Beijing also ramped up efforts to strengthen trade ties with other global partners. These developments signal that the standoff is far from over.
As a result, investors are pricing in heightened risks of a U.S. recession. Analysts believe there is at least a 50% chance of economic contraction this year. This recession risk has bolstered safe-haven demand for gold in recent weeks.
Goldman Sachs Lifts Gold Forecast
Adding to the bullish momentum, Goldman Sachs increased its 2025 gold price forecast. The bank now projects prices to hit $3,700 per ounce, up from $3,300. In an extreme scenario, it suggests gold could surge to $4,500 per ounce by year-end.
According to Goldman, the ongoing U.S.-China tensions and rising recession fears will continue driving investors toward gold. They view it as a solid hedge against market volatility and economic uncertainty.
Metal Markets Show Mixed Performance
While gold stayed in the spotlight, other precious metals moved unevenly. Platinum futures rose 0.8% to $951.90 per ounce. Silver futures slipped 0.3% to $31.83. Industrial metals like copper remained steady, with prices on the London Metal Exchange at $9,152.90 per ton.
What’s Next for Investors?
As the trade tariff impact continues to evolve, investors should stay alert. Any shifts in U.S.-China relations or Federal Reserve policy could spark further movement in gold prices. With uncertainty still looming, gold remains a key asset to watch.
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