Gold rises to its highest level in three weeks – what are the prospects for the future?

Gold prices jumped more than 1% on Monday to reach $5,176 per ounce, their highest level in more than three weeks, supported by growing uncertainty over US tariffs and escalating geopolitical tensions, before seeing some corrections near the $5,125 level.

Tariffs support demand for gold

The rise in gold came after US President Donald Trump announced plans to raise global tariffs from 10% to 15%, following the US Supreme Court's rejection of some reciprocal tariffs.

Trump confirmed that the new tariffs would take effect immediately, although it is unclear whether an official decision has been signed yet, adding to the uncertainty in global markets.

Fears of escalating trade disputes typically prompt investors to turn to gold as a safe haven in times of economic and political instability.

Global trade tensions increase pressure

On the other hand, the European Trade Commissioner has suggested suspending the ratification of a trade agreement with the United States, while India has decided to postpone negotiations on a provisional trade agreement with Washington, adding further uncertainty to the global trade landscape.

These developments have boosted demand for gold amid fears of a slowdown in global economic growth and rising inflation rates as a result of protectionist policies.

Tensions with Iran boost gold's appeal

In addition to trade risks, investors face growing concerns about the possibility of a US military strike on Iran, especially after the stalling of nuclear talks.

Although a new meeting of negotiators has been scheduled for Thursday in Geneva, markets remain cautious about any potential escalation that could affect the stability of the region and global energy markets.

Central banks and their role in supporting gold prices

The Indian finance minister said that central banks around the world are playing a key role in the rise in gold prices, noting that their large purchases of the precious metal have contributed to the recent upward trend in prices.

Institutional demand from central banks is bolstering the long-term trend for gold, especially as many countries are diversifying their reserves away from the dollar.

Gold price outlook

Amid continued uncertainty over tariffs and geopolitical tensions, gold may continue to benefit from demand for safe-haven assets. However, any breakthrough in trade or nuclear talks could push prices into some correction in the short term.

Gold currently remains in an uptrend supported by multiple political and economic factors, making it a focus for investors in the coming days.