The precious metals market stabilised on Tuesday following a highly volatile session on Monday, with gold edging slightly higher after hitting record levels amid renewed concerns over US trade policy and geopolitical risks.
By 15:30 GMT, spot gold was trading at $5,072 after peaking at $5,111.11 an ounce the previous day.
Investor focus remains on the US Federal Reserve meeting this week, although interest rates are widely expected to be held steady. Risk-averse sentiment continues to underpin safe-haven demand for gold and silver, following a series of trade threats by President Donald Trump.
Trump objected to a potential trade deal between Canada and China, threatening 100% tariffs on Canadian goods. He also announced a 25% tariff on South Korean imports, citing delays in implementing a recent trade agreement. While the president has softened his stance on Greenland and paused threats against Europe, markets remain wary of further disruptive moves.
Heightened geopolitical tensions in the Middle East, particularly around Iran as US naval assets arrived in the region, added to the cautious mood. With political, economic, financial, and geopolitical risks at some of the highest levels in decades, demand for gold has broadened globally, with countries such as China and India actively promoting bullion investment.
Gold has risen sharply in recent weeks, boosted by safe-haven flows and dollar weakness, while silver traded slightly lower at $106 an ounce after hitting a record high of over $113 on Monday.
Tight physical markets, low inventories, and elevated lease rates continue to support silver prices, although elevated levels could trigger industrial demand reductions and keep volatility high.