Gold prices dipped slightly during Asian trading hours on Monday, retreating from recent gains after U.S. President Donald Trump postponed a proposed 50% tariff on the European Union. However, losses were contained amid ongoing dollar weakness and continued selling in U.S. Treasury markets.
Spot gold slipped 0.2% to $3,349.45 per ounce, while June gold futures dropped 0.5% to $3,376.91 by 00:54 ET (04:54 GMT). Despite the decline, the yellow metal remained buoyed by broader market uncertainty and safe-haven demand.
Trump Delays EU Tariffs Amid Positive Talks
In a statement on Sunday evening, Trump announced he would delay the imposition of 50% tariffs on the European Union until early July, citing “positive dialogue” with European Commission President Ursula von der Leyen. The announcement marked a shift from his remarks just two days earlier, when he threatened to implement the tariffs as early as June due to what he called slow progress in trade negotiations.
While Trump’s decision provided temporary relief to risk-sensitive assets, investor sentiment remained cautious. The President’s repeated reversals on tariff threats have led to increased volatility in global markets throughout the year.
Trump also signaled that the July 9 deadline applies to a broader set of proposed tariffs targeting key U.S. trading partners. On Friday, he additionally threatened to impose duties on smartphone imports, further unsettling investors.
The ongoing unpredictability of U.S. trade policy has contributed to strong gains in gold this year, with prices hitting a record high of $3,500 per ounce earlier in May.
Fed’s Kashkari Warns of Stagflation Risk; Dollar Extends Losses
Broader metal markets strengthened amid renewed concerns over U.S. economic stability and a weaker dollar. Minneapolis Federal Reserve President Neel Kashkari on Sunday warned that the proposed tariffs could trigger stagflation—a toxic mix of sluggish growth and rising inflation. He also indicated that the Fed is unlikely to adjust interest rates before September given the current uncertainty.
The U.S. dollar index fell 0.3% during Asian trade, weighed down by fiscal concerns and light trading volumes due to public holidays in both the U.S. and the UK. The dollar has faced sustained pressure in recent weeks, driven by fears over the U.S. government’s mounting debt and deteriorating fiscal outlook.
In other precious metals, platinum futures rose 0.7% to $1,095.90 per ounce, while silver futures gained 0.3% to $33.69 per ounce.
