Market News
Gold slips as investors opt for dollar as trade war fears deepen
By Brijesh Patel
(Reuters) - Gold prices fell more than 1% on Monday as investors opted for the dollar as a safe haven after sweeping U.S. tariffs raised fears of a global recession.
Analysts, however, remained bullish on bullion given the challenging economic conditions.
Spot gold was down 1.3% to $2,999.49 an ounce as of 10:59 a.m. ET (1459 GMT), after hitting a more than three-week low of $2,971.09 earlier in the session. U.S. gold futures slipped 0.6% to $3,015.80.
"Gold retreats as investors turn to cash and other safe havens like the Swiss Franc and the Japanese Yen amid market turmoil, creating a risk of deeper corrections," said Nikos Tzabouras, senior market analyst at Tradu.com.
The dollar rose against its rivals, moving away from a six-month low touched last week. A stronger greenback makes gold more expensive for other currency holders. [USD/]
Major stock indexes and U.S. share futures plunged, with the S&P 500 poised to confirm a bear market, while volatility gauges spiked as U.S. President Donald Trump showed no sign of backing away from his tariff plans. [MKTS/GLOB] [.N]
"Once the dust settles, the rising recession risks, a weaker dollar, lower real yields and bigger rate cut expectations will all play their part in supporting a rebound (in gold)," said Ole Hansen, head of commodity strategy at Saxo Bank.
Futures now point to around 120 basis points' worth of interest rate cuts by the U.S. Federal Reserve by December, with markets pricing in about a 47% chance of a U.S. rate cut in May.
"Gold retreats as investors turn to cash and other safe havens like the Swiss Franc and the Japanese Yen amid market turmoil, creating a risk of deeper corrections," said Nikos Tzabouras, senior market analyst at Tradu.com.
The dollar rose against its rivals, moving away from a six-month low touched last week. A stronger greenback makes gold more expensive for other currency holders. [USD/]
Major stock indexes and U.S. share futures plunged, with the S&P 500 poised to confirm a bear market, while volatility gauges spiked as U.S. President Donald Trump showed no sign of backing away from his tariff plans. [MKTS/GLOB] [.N]
"Once the dust settles, the rising recession risks, a weaker dollar, lower real yields and bigger rate cut expectations will all play their part in supporting a rebound (in gold)," said Ole Hansen, head of commodity strategy at Saxo Bank.
Futures now point to around 120 basis points' worth of interest rate cuts by the U.S. Federal Reserve by December, with markets pricing in about a 47% chance of a U.S. rate cut in May.
