Jewellery is displayed at the Gold Souk market in Dubai, United Arab Emirates, March 14, 2025. REUTERS
June 2 (Reuters) – Gold prices rose more than 1% on Monday as an escalation in the Russian war in Ukraine and U.S. President Donald Trump’s fresh threat to double tariffs on imported steel and aluminium prompted investors to seek refuge in safe-haven bullion.
Spot gold was up 1.2% at $3,326.45 an ounce, as of 0606 GMT. U.S. gold futures rose 1.1% to $3,351.
Trump said on Friday that he plans to raise tariffs on imported steel and aluminium to 50% from 25%, prompting the European Commission to warn that Europe is prepared to retaliate.
“With trade and geopolitical worries bubbling to the surface once again, it’s no surprise to see gold ticking higher to start the week,” said Tim Waterer, chief market analyst at KCM Trade.
Ukraine and Russia escalated hostilities ahead of their second round of peace talks in Istanbul, with a wave of attacks that included one of Ukraine’s boldest strikes of the war and an overnight drone assault by Russia.
“Risk assets are on the back foot to start the week while a dip in the dollar is also keeping gold supported,” Waterer said.
The U.S. dollar index edged 0.1% lower, making bullion less expensive for overseas buyers.
Markets are awaiting speeches from several U.S. Federal Reserve officials this week for cues on the monetary policy outlook, with Fed Chair Jerome Powell set to speak later in the day.
Fed Governor Christopher Waller said that interest rate cuts remain possible later this year even as the Trump administration’s tariff regime is likely to push up price pressures temporarily.
Gold, which is considered a safe-haven asset during the time of geopolitical and economic uncertainty, tends to thrive in a low-interest rate environment.
Meanwhile, Trump and Chinese President Xi Jinping are expected to speak soon to iron out trade issues including a dispute over critical minerals, Treasury Secretary Scott Bessent said on Sunday.
Elsewhere, spot silver rose 0.6% to $33.16 an ounce, platinum was down 0.5% at $1,050.83 and palladium was steady at $970.31.
Reporting by Anmol Choubey in Bengaluru; Editing by Mrigank Dhaniwala and Sherry Jacob-Phillips