Gold prices eased from two-week highs during Monday's Asian trade as markets paused following a sharp rally, despite underlying bullish factors keeping the precious metal supported.
By 3:50 pm AEST (5:50 am GMT) spot gold prices were down by $11.35 or 0.3% to US$3,347.86 per ounce.
The retreat came amid light liquidity conditions due to global holidays, with buyers taking a breather ahead of key United States economic data later in the week.
Despite the decline, gold's outlook remains bullish, buoyed by sustained weakness in the U.S. dollar and continued safe-haven demand.
The dollar struggled to gain ground even after U.S. President Donald Trump extended a deadline for imposing tariffs on the European Union until 9 July, backing away from an earlier threat of a 50% levy starting 1 June.
The U.S. Dollar Index (DXY) slipped about 0.3% on Monday to trade near 98.80, touching multi-week lows against a basket of major currencies.
Over the weekend, Russian missiles and drones struck more than 30 cities and villages across Ukraine, killing at least 12 people.
Meanwhile, on the diplomatic front, Iranian Foreign Minister Abbas Araghchi noted that nuclear talks with the U.S. remained “complicated” after the fifth round of discussions concluded in Rome.
Fiscal issues also remain in focus. Last week, the U.S. House of Representatives passed President Trump’s wide-ranging tax and spending bill, a move expected to further expand the country’s already massive US$36 trillion national debt.
Investors are also keeping an eye on rising trade tensions, particularly following Trump’s warning to Apple Inc. on Friday. The president threatened to impose a 25% import tax “at least” on iPhones not manufactured in the U.S., later expanding the threat to include all smartphones.
Looking ahead, traders will closely monitor upcoming U.S. inflation data, which could influence expectations for Federal Reserve policy.
