Gold prices retreated Tuesday from a three-week high after four consecutive sessions of gains, as investors took profits and the greenback firmed amid renewed jitters over U.S. trade tariffs.
At 04:30 ET (09:30 GMT), spot gold declined 1.1% to $5,170.51 per ounce, pulling back after climbing to its strongest level since late January in early trading, and U.S. Gold Futures fell 0.7% to $5,190.44/oz.
The yellow metal surged 2.5% in the previous session, as uncertainty resurfaced around U.S. trade policy.
Additionally, silver prices dropped nearly 2% to $86.55/oz on Tuesday, after four sessions of gains.
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Stronger dollar weighs on gold The US Dollar Index ticked 0.1% higher Tuesday, bouncing back from losses of around 0.5% to close largely flat on Monday. A stronger dollar makes bullion more expensive for holders of other currencies.
Last week, the U.S. Supreme Court struck down President Donald Trump’s earlier sweeping tariffs, only for the administration to swiftly announce new levies of up to 15%, reviving fears of escalating trade disputes.
Trump on Monday warned that countries that “play games” with U.S. trade agreements would face higher tariffs, signalling scope for further measures despite the legal setback.
Geopolitical tensions also remained in focus. The U.S. and Iran are set to hold a third round of nuclear talks in Geneva on Thursday, even as military pressure and regional strains persist.
UBS sees gold reaching $6,200/oz Despite Tuesday’s retreat, UBS has reiterated an attractive stance on gold, forecasting a rise to $6,200 per ounce in the coming months, arguing that the fundamental pillars behind the rally remain firmly in place.
On geopolitics, the bank expects uncertainty to remain elevated. The U.S. military build-up in the Middle East and a tightening deadline for a nuclear deal with Iran increase the probability of further volatility. While UBS noted that geopolitical shocks often have only temporary effects on broad markets, they tend to trigger sharp volatility spikes, conditions that typically boost demand for portfolio hedges such as gold.
Macro conditions are seen as equally supportive. UBS expects the Federal Reserve to continue easing, forecasting two 25bp rate cuts by end-September. A softer U.S. dollar and declining real yields would reinforce gold’s appeal, particularly if inflation continues to ease and the Fed’s policy mix turns more dovish later this year.
