London — Gold prices edged lower on Tuesday as traders locked in their profits following the metal’s strongest daily gain in nearly a month, as markets reacted to recent geopolitical and trade developments. Despite the pullback, the precious metal held close to four-week highs, underpinned by lingering uncertainty across global markets.
On Monday, the bullion surged nearly 3% as President Donald Trump’s threat to double tariffs on steel and aluminum reignited fears of a trade escalation. At the same time, accusations that China violated a previous agreement further strained US-China relations. The White House has confirmed that Trump and Chinese President Xi Jinping are likely to speak later this week, offering a potential de-escalation path.
Geopolitical tensions add to the appetite for gold and could support a return to the upside. In Eastern Europe, Russia and Ukraine concluded a second round of direct peace talks with no tangible progress. In the Middle East, rising tensions could continue to fuel safe-haven demand.
Traders now turn their attention to upcoming macroeconomic releases, including the JOLTS job openings report, for further clues on the US economic outlook. Persistent concerns over fiscal imbalances and expectations for Fed rate cuts later this year should continue to lend underlying support to gold.
*Bas Kooijman is the CEO and Asset Manager of DHF Capital S.A
