Gold Prices Slip to 3-Week Low Amid Trade War and Recession Fears

Gold prices fell to a three-week low in Asian trading on Monday as investors sold off assets to cover broader market losses triggered by escalating global trade tensions and rising fears of a recession. Spot gold dropped 0.5% to $3,023.10 per ounce by 02:12 ET (06:12 GMT), its lowest level since March 13. Despite hitting record highs last week, the precious metal retreated following U.S. President Donald Trump's aggressive new tariff policy.

Trump announced a blanket 10% tariff on all imports, with specific duties reaching up to 49% on goods from China and the European Union. In response, China imposed a 34% tariff on U.S. imports, while the EU signaled plans for a coordinated response. These developments rattled global markets, raising concerns about a sharp slowdown in global economic growth.

Major banks revised their recession forecasts, with Goldman Sachs raising its 2025 U.S. recession probability to 45%, up from 35%, and JPMorgan increasing its global recession risk for this year to 60%, from a prior 40%.

Although gold is traditionally considered a safe-haven asset, analysts from ING noted that investors liquidated gold positions along with other assets to cover losses elsewhere. Still, the decline in gold was less severe than in other markets, partly due to weakness in the U.S. dollar and growing expectations of Federal Reserve rate cuts.

The U.S. Dollar Index slipped 0.5% in Asian trading, supporting other metals. Silver futures surged 2% to $29.805 an ounce, while platinum held steady at $914.35. Copper prices also rose, with London futures climbing 1.1% to $8,846.50 a ton, though trade war concerns kept gains in check.