Gold prices climb as dollar weakens following US retail sales dip

WASHINGTON: Gold prices rose on Monday as the dollar weakened after US retail sales fell in January, while investors await details on President Donald Trump’s reciprocal tariff plans, which could heighten the potential for a global trade war.

Spot gold was up 0.6 per cent at $2,900.60 per ounce, as of 0714 GMT. US gold futures gained 0.4 per cent to $2,911.80.

The dollar index hovered near a two-month low on weaker-than-expected U.S retail data for January.

A weaker dollar makes bullion more affordable for holders of other currencies.

Gold is being supported by the dollar’s weakness and uncertainty over how Trump will engage with major trading partners in enforcing his tariff policy, said Kelvin Wong, senior market analyst, Asia Pacific, at OANDA.

Trump renewed his tariff threats on Friday, saying that levies on automobiles would be imposed as early as April 2, soon after he instructed officials to study reciprocal tariffs against countries that impose duties on US goods.

Meanwhile, US Secretary of State Marco Rubio arrives in Saudi Arabia on Monday ahead of expected talks with Russian officials, aimed at ending Moscow’s nearly three-year war in Ukraine.

“If talks between US and Russian officials improve the odds for a peace deal being reached that ends the war, safe-haven buying demand could wane, which could see gold lose some of its impetus,” said Tim Waterer, chief market analyst at KCM Trade.

“But with tariff and inflation talk still a worry for investors, gold could still rally even if safe-haven flows recede.”

Bullion is viewed as a hedge against rising prices and geopolitical uncertainties.

Spot silver rose 0.2 per cent to $32.21 an ounce on the day, after hitting its highest level since October 31 on Friday, latching on to factors that drove gold to successive record highs. Some analysts suggested investors in the metal may aim to challenge a 10-year high.

Platinum gained 0.7 per cent to $988.75 and palladium jumped 2.1 per cent to $981.16.

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