Gold Price Forecast: US Dollar weakness, renewed tariff threats, and safe-haven appeal lift Gold

LONDON (June 2) Gold prices are trading positively on Monday, driven by market uncertainty and an increased demand for safe-haven assets.

Market sentiment has turned cautious due to a series of developments, including US President Donald Trump’s intention to double tariffs on steel and aluminium from 25% to 50%. The growing tariff threats and escalating trade tensions have posed a significant risk to risk assets, while a weaker US Dollar has been supportive of Gold prices.

Tensions between the US and China have also intensified, with Beijing pushing back against Trump's accusations that it violated a trade agreement reached in Geneva. 

Gold daily digest: Trump tariffs, US-China trade wars come back in focus

• In his post on Truth Social on Friday, Trump stated:” China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!”
• The Geneva deal had established a 90-day pause on escalating tariffs between the two nations, with the US reducing tariffs on Chinese goods from 145% to 30%, and China lowering tariffs from 125% to 10%. The agreement also included provisions for China to lift restrictions on the export of critical minerals essential to US industries.
• In response to Trump's accusations, China's Ministry of Commerce labelled them as "groundless" and asserted that the US had introduced several "discriminatory restrictive measures," including export control guidelines for AI chips, a sales ban on chip design software, and the revocation of Chinese student visas. China emphasized its commitment to safeguarding its legitimate rights and interests and vowed to take "resolute and forceful measures" if the US continued its actions.
• With the US Dollar under renewed pressure, increased demand for safe havens could see Gold prices continue to receive a positive boost from the shift in sentiment.

FXStreet