Gold prices dipped slightly in Asian trading on Monday, trimming some of the gains seen last week after U.S. President Donald Trump backed away from an earlier threat to immediately impose 50% tariffs on imports from the European Union.
Despite the pullback, gold’s losses were tempered by ongoing weakness in the U.S. dollar and continued selling pressure in U.S. Treasuries. Investors remain concerned about the country’s worsening fiscal outlook and ballooning debt levels.
Adding to the unease, Minneapolis Federal Reserve President Neel Kashkari cautioned that the tariff uncertainty could lead to a period of stagflation — a scenario marked by stagnant economic growth and rising inflation — which has helped sustain demand for safe haven assets like gold.
As of 00:54 ET, spot gold was down 0.2% at $3,349.45 per ounce, while June gold futures slipped 0.5% to $3,376.91 per ounce.
Tariff Threat Pushed to July
President Trump said Sunday night that he would delay his proposed 50% tariffs on EU goods until early July, referencing productive talks with European Commission President Ursula von der Leyen. This marked a reversal from Friday, when Trump threatened to implement the tariffs starting in early June, citing a lack of progress in trade discussions.
While Sunday’s announcement offered a brief reprieve to markets sensitive to risk, it also underscored growing skepticism among traders regarding the consistency of Trump’s policy signals. His shifting stance on tariffs has led to volatile swings across asset classes throughout the year.
The new July 9 deadline applies not only to tariffs on EU imports but also to potential broader levies targeting key U.S. trading partners. Trump also floated the idea on Friday of placing tariffs on imported smartphones, prompting caution among investors.
Ongoing trade tensions have been a significant factor in gold’s impressive performance this year, with the metal touching a record $3,500 per ounce earlier in May.
Weak Dollar and Fed Caution Support Metal Prices
Elsewhere in the metals market, a broadly weaker dollar helped buoy prices. The greenback dropped 0.3% in Monday’s Asian session, though trading volumes were expected to be thin due to holidays in both the U.S. and U.K.
The dollar has been under pressure in recent weeks amid rising alarm over America’s fiscal trajectory. Kashkari’s warning about possible stagflation only added to the sense of caution among investors.
In other metals, platinum futures rose 0.7% to $1,095.90 per ounce, while silver futures gained 0.3% to $33.690 per ounce.