Gold prices (XAU/USD) edged lower to around $2,925 during Asian trading hours on Monday, easing from last week’s record high of $2,954 as investors took profits. However, concerns over U.S. President Donald Trump’s tariff plans are expected to limit further downside for the precious metal.
Profit-Taking Weighs on Gold, but Fundamentals Stay Strong
Gold faced selling pressure after reaching an all-time high, with market participants locking in gains. “It’s just a classic movement of new all-time highs and profit-taking… but the fundamentals for gold remain solid,” said Alex Ebkarian, Chief Operating Officer at Allegiance Gold.
Investor demand for bullion remains underpinned by economic uncertainty and political instability. Last week, Trump announced plans to expand tariffs, adding lumber and forest products to his existing proposals targeting imported cars, semiconductors, and pharmaceuticals. The prospect of escalating trade tensions continues to drive inflation fears, further reinforcing gold’s appeal as a safe-haven asset.
Fed Policy and Dollar Strength Pose Near-Term Risks
Meanwhile, the Federal Reserve’s January meeting minutes, released last week, indicated that Trump’s tariff policies had raised inflation concerns. This has strengthened the Fed’s resolve to keep interest rates steady, a stance that could support the U.S. dollar and weigh on gold prices in the near term.
Despite the current pullback, ongoing trade uncertainty and economic risks are expected to keep gold’s bullish outlook intact, with investors closely monitoring developments in U.S. trade policy and Federal Reserve decisions in the coming weeks.
