Gold prices moved lower on Tuesday after reaching a three-week peak, snapping a four-day run of gains as investors locked in profits and the U.S. dollar strengthened amid renewed uncertainty surrounding American trade tariffs.
At 04:30 ET (09:30 GMT), spot gold fell 1.1% to $5,170.51 per ounce, retreating after earlier touching its highest level since late January. U.S. gold futures also declined, slipping 0.7% to $5,190.44 per ounce.
The precious metal had rallied 2.5% in the previous session as concerns about U.S. trade policy resurfaced. Silver prices also reversed course, dropping nearly 2% to $86.55 per ounce on Tuesday following four consecutive sessions of gains.
Stronger dollar pressures bullion
The U.S. Dollar Index edged up 0.1% on Tuesday, recovering after losing roughly 0.5% earlier and finishing Monday largely unchanged. A firmer dollar typically weighs on gold by making the metal more expensive for investors using other currencies.
Last week, the U.S. Supreme Court overturned President Donald Trump’s earlier sweeping tariff measures, prompting the administration to quickly introduce new duties of up to 15%, reigniting concerns about escalating global trade tensions.
Trump warned on Monday that countries that “play games” with U.S. trade agreements would face higher tariffs, suggesting the possibility of additional measures despite the legal challenges.
Geopolitical developments also remained closely watched. The United States and Iran are scheduled to hold a third round of nuclear negotiations in Geneva on Thursday, even as military tensions and regional pressures continue to build.
UBS maintains bullish outlook, targets $6,200 gold
Despite Tuesday’s decline, UBS reaffirmed a positive outlook for gold, projecting prices could climb to $6,200 per ounce in the months ahead, arguing that the core drivers of the rally remain intact.
From a geopolitical perspective, the bank expects uncertainty to stay elevated. Increased U.S. military activity in the Middle East and tightening timelines for a nuclear agreement with Iran raise the likelihood of further market volatility. UBS noted that while geopolitical shocks often have only short-lived effects on broader markets, they frequently trigger sharp spikes in volatility — conditions that tend to support demand for hedging assets such as gold.
Macroeconomic trends are also viewed as supportive. UBS anticipates the Federal Reserve will continue easing monetary policy, forecasting two 25-basis-point rate cuts by the end of September. A weaker U.S. dollar and falling real yields would further enhance gold’s attractiveness, particularly if inflation continues to moderate and the Fed adopts a more dovish policy stance later this year.