Gold rose more than 1.5% in mid-day trading on Monday, June 2, benefiting from a decline in risk appetite in markets caused by rising geopolitical tensions and tariffs, as well as a decline in the US dollar. Gold is trading up approximately 1.78% at $3,347 per ounce, while silver is trading at $33.25 per ounce, up 0.86%.
Safe-haven currencies and assets, led by gold, have been receiving support since the beginning of the week after US President Donald Trump announced his intention to increase tariffs on steel and aluminum imports to 50% from 25%. This will escalate tensions between the United States and its steel and aluminum manufacturing partners, such as Canada, Brazil, and Mexico, and thus increase market uncertainty. Meanwhile, tensions between Russia and Ukraine escalated after the latter launched an attack on military bases deep inside Russia, targeting 41 Russian aircraft, according to Ukrainian media.
In response, the Chinese Ministry of Commerce issued a statement this morning condemning US President Trump’s claim that China had violated the recent agreement between the two countries. Both sides have traded accusations of violating the trade agreement, threatening to destabilize the 90-day truce reached in Geneva in May and raising fears of a resumption of the trade war between the two countries.
The US dollar index also declined in the opening session, supporting the yellow metal’s gains, trading at 98.76, losing more than 0.50%. Federal Reserve Chairman Christopher Waller announced that recent data supports interest rate cuts this year and that inflation resulting from recent tariffs will not persist.
Platinum, meanwhile, is trading at $1.044, down approximately 1.11%, while palladium is up approximately 0.33%, trading at $973.