Gold (XAU/USD) prices edged up in Asian trading on Monday, with investors leaning towards safer assets amid escalating trade tensions and political uncertainty.
By 09:50 GMT, spot gold stood at $3,366 an ounce, benefiting from a softening US dollar after its two-week climb.
The metal found additional support following a report from the Wall Street Journal, which revealed the European Union was preparing retaliatory measures in response to US tariff threats. Washington is reportedly demanding broader concessions from Brussels, including a minimum 15% tariff rate as part of ongoing trade negotiations. This stance surprised EU negotiators and added to the market’s sense of caution.
With the clock ticking towards the August 1 deadline for the new US tariffs, comments from Commerce Secretary Howard Lutnick confirmed the timetable was fixed, with tariff levels ranging from 20% to 50%. The prospect of higher tariffs on major economies fuelled demand for gold as a hedge against market volatility.
Uncertainty surrounding Japan’s political direction further supported the safe-haven appeal of gold. The ruling LDP party, led by Prime Minister Shigeru Ishiba, lost its majority in the upper house over the weekend. The outcome complicates Tokyo’s trade talks with Washington and clouds the outlook for domestic reforms.
Gold has largely traded within a range since June, but the combination of trade friction and political shifts helped lift prices to start the week.