Gold Prices Dip After Hitting Record High Amid Improved Risk Sentiment

Gold prices witnessed a decline on Monday, retracting from a significant peak reached earlier in the day. Spot gold fell by 0.7% to settle at $3,213.69 an ounce, following an all-time high of $3,245.42. Similarly, U.S. gold futures dipped by 0.6%, ending at $3,226.30. This pullback coincided with an improved risk appetite in financial markets, particularly after the White House announced exemptions for smartphones and computers from hefty tariffs imposed on imports from China. Analysts, like Bart Melek from TD Securities, observed that while some risk-on trading reduced gold's recent highs, underlying factors still favor the precious metal. Peter Grant from Zaner Metals indicated that the tariff exemptions may reduce immediate safe-haven demand for gold, but ongoing uncertainties surrounding trade, the dollar's weakness, and lower yield rates are likely to continue supporting gold's value. Trump's upcoming announcement regarding semiconductor tariffs adds another layer of uncertainty for market participants. The current geopolitical atmosphere, influenced by the trade tension between the U.S. and China, has pushed investors toward gold as a typical hedge against economic instability. Goldman Sachs remains notably bullish on gold, adjusting its year-end forecast to $3,700 due to strong central bank demand and recession fears. Furthermore, investment in Chinese physically backed gold ETFs has already surpassed first-quarter totals, outpacing those of U.S.-listed funds, according to the World Gold Council. In related movements, silver, platinum, and palladium also saw minor gains, reflecting a nuanced landscape in precious metal markets.