Gold prices edged lower on Tuesday, pulling back from a three-week high and ending a four-session winning streak as investors took profits while the U.S. dollar strengthened amid renewed uncertainty surrounding American trade tariffs.
At 04:30 ET (09:30 GMT), spot gold declined 1.1% to $5,170.51 per ounce after earlier reaching its strongest level since late January. U.S. gold futures also moved lower, falling 0.7% to $5,190.44 per ounce.
The precious metal had surged 2.5% in the previous session as concerns over U.S. trade policy resurfaced. Silver followed a similar pattern, retreating nearly 2% to $86.55 per ounce on Tuesday after posting gains across the prior four sessions.
Firmer dollar pressures bullion prices
The U.S. Dollar Index rose 0.1% on Tuesday, recovering after a roughly 0.5% decline earlier and ending Monday broadly unchanged. A stronger dollar typically weighs on gold demand by increasing the metal’s cost for buyers using other currencies.
Last week, the U.S. Supreme Court invalidated President Donald Trump’s earlier sweeping tariff measures, prompting the administration to quickly introduce new duties of up to 15%, reviving concerns about escalating global trade tensions.
Trump warned on Monday that countries that “play games” with U.S. trade agreements would face higher tariffs, signalling the potential for further action despite ongoing legal challenges.
Geopolitical developments also remained in focus. The United States and Iran are expected to hold a third round of nuclear negotiations in Geneva on Thursday, while military tensions and regional pressures continue to linger.
UBS reiterates bullish view, targets $6,200 per ounce
Despite Tuesday’s pullback, UBS maintained a constructive outlook for gold, projecting prices could rise to $6,200 per ounce in the months ahead, arguing that the fundamental drivers supporting the rally remain intact.
From a geopolitical standpoint, the bank expects elevated uncertainty to persist. Increased U.S. military activity in the Middle East and a tightening timeline for a nuclear agreement with Iran raise the likelihood of further market volatility. UBS noted that although geopolitical shocks often have short-lived impacts on broader markets, they frequently trigger sharp volatility spikes — conditions that typically increase demand for hedging assets such as gold.
Macroeconomic trends are also viewed as supportive. UBS expects the Federal Reserve to continue easing monetary policy, forecasting two 25-basis-point rate cuts by the end of September. A softer U.S. dollar and declining real yields would further strengthen gold’s appeal, particularly if inflation continues to moderate and the Fed adopts a more dovish stance later this year.
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