Gold rises as trade policy uncertainty lingers

Gold bars

Gold prices climbed on Tuesday, as investors continued to seek safe-haven assets amid persistent uncertainty over US trade policies under President Donald Trump.

June gold futures settled 0.4% higher at $3,240.4 per ounce.

The gains came after the US administration launched an investigation on Monday into whether imports of pharmaceuticals and semiconductors pose a threat to national security—a move that could pave the way for fresh tariffs on these products.

The decision reignited trade tensions just days after Washington suspended its sweeping reciprocal tariff measures on all countries for a three-month period.

However, gains in bullion were capped by a stronger dollar, with the US dollar index—measuring the greenback against a basket of six major currencies—rising 0.61% to 100 points as of 9:44 p.m. local time in Mecca.

The dollar has weakened in recent weeks amid intensifying global trade tensions, with the index falling to around 99 points in Monday’s session.

"The rise in the gold price is also partly in line with the continuing weakness of the dollar, which points to a gradual erosion of the US currency's status as a safe asset—gold is likely to be an alternative for many USD investors," Commerzbank said in a note cited by Reuters.