Jun 2, 2025

Gold prices soared to nearly a one-month high on Monday, driven by escalating geopolitical risks and economic uncertainties that have spurred investors to seek refuge in safe-haven assets. According to Mining.com, spot gold surged 2.6% to approximately $3,377 an ounce by 11:00 a.m. ET, marking its highest level since early May. Concurrently, US gold futures saw a similar increase of 2.6%, trading just above $3,400 an ounce in New York.

The weakening of the US dollar, which fell about 0.6% against other currencies, has further enhanced the appeal of bullion by making it more affordable for buyers. This development comes amid a backdrop of renewed Sino-American trade tensions, with investors bracing themselves for a week filled with economic and political challenges, including a crucial US jobs report.

Peter Grant, vice president and senior metals strategist at Zanier Metals, noted that the latest tariff threats, including plans to double steel and aluminum tariffs, along with Ukraine’s weekend attacks into Russia, have intensified geopolitical risks and fueled risk-off sentiment. The tensions between Washington and Beijing have resurfaced following US President Donald Trump’s accusations against China of violating their trade truce, which China has denied.

US Treasury Secretary Scott Bessent indicated the possibility of an upcoming call between Trump and China’s President Xi Jinping to address the trade issues. Investors are also keenly observing comments from Fed Chair Jerome Powell and other policymakers this week for insights into the US rate path.

Fawad Razaqzada, market analyst at City Index and FOREX.com, highlighted that the current climate of trade war fears, fiscal uncertainty, and US debt ceiling concerns creates a volatile environment. “For the gold forecast, this backdrop of risk aversion and fiscal uncertainty couldn’t be more favourable,” he remarked.

In addition, silver, often considered gold’s sister metal, experienced a rally of over 4% as investors flocked to safe havens.

Source: IndexBox Market Intelligence Platform