Gold Climbs After Trump Trade Threats, Awaits Fed Signals
Gold extended its Monday gains after its steepest one-day drop in two months, as investors remain nervous over President Donald Trump's latest trade threats.
Spot bullion traded near $2,900 an ounce, holding onto Monday's gains despite the 14-day relative strength index indicating overbought conditions.
Analysts speculate that Trump's tariffs may serve as a negotiating tool, despite the uncertainty surrounding their implementation. The administration's muddled trade policies, coupled with geopolitical and economic uncertainties, continue to enhance gold's safe-haven appeal.
Traders monitor US economic data to gauge the Federal Reserve's potential easing path, with recent retail sales figures suggesting the central bank may cut interest rates by September. Lower borrowing costs tend to support gold, which does not bear interest.
Money managers reduced their bullish bets on gold to a four-week low by Feb. 11, as per CFTC data. However, gold extended its weekly winning streak to seven, its longest since 2020, buoyed by central bank purchases and rising holdings in bullion-backed ETFs. Gold hit an all-time high of $2,942.68 an ounce on Tuesday.
Spot gold increased 0.6% to $2,899.81 an ounce by 1:08 p.m. in Singapore, adding to last week's 0.8% gain. The Bloomberg Dollar Spot Index edged down 0.1%. Palladium gained over 1%, while silver and platinum also advanced.