Gold retreats after rally fueled by Mideast tensions

Gold retreated on Tuesday as traders locked in profits following four consecutive sessions of gains driven by uncertainty over US trade policy and rising tensions in the Middle East.

Bullion dropped as much as 1.6% as Chinese traders returned to the market after the Lunar New Year holiday, News.Az reports, citing Bloomberg.

The metal had surged more than 7% over the previous four sessions, buoyed by demand for safe-haven assets amid fresh tariff threats from Donald Trump and renewed US-Iran tensions.

Markets remain unsettled after Trump said he would raise a global import levy to 15% following a ruling by the Supreme Court of the United States against his proposed reciprocal tariffs. A previously announced 10% import tax took effect on Tuesday, while the timeline for the higher rate has yet to be finalized.

Several US trading partners are grappling with the implications of the new tariffs, particularly as they appear to conflict with earlier trade arrangements. An assessment by the European Union found that the updated measures could push duties on some European exports above levels permitted under existing agreements.

Amid the heightened risk environment, gold has stabilized above $5,000 an ounce after experiencing a sharp selloff at the beginning of the month. A wave of speculative buying had driven a multi-year rally to record highs above $5,595 in late January before prices corrected sharply. Since then, bullion has recouped more than half of those losses, though price swings have remained volatile.

Major financial institutions, including BNP Paribas, Deutsche Bank and Goldman Sachs, have projected a recovery in gold prices. Analysts cite enduring concerns about the independence of the Federal Reserve, a broader move away from sovereign bonds and currencies, and persistent geopolitical risks — especially in the Middle East.

The United States has assembled its largest military presence in the region since 2003 as talks on Iran’s nuclear program are set to resume this week. While expressing a preference for diplomacy, Trump warned it would be a “very bad day” for Iran if no agreement is reached and dismissed reports suggesting the Pentagon had concerns about the potential challenges of a prolonged military campaign.

As of 3:02 p.m. Singapore time, gold was down 1.1% at $5,169.73 an ounce. Silver slipped 0.1% to $88.09 after earlier dropping as much as 3.6%. Platinum was little changed, while palladium rose 1%. The Bloomberg Dollar Spot Index edged up 0.1%.

News.Az 

By Nijat Babayev