Gold prices correct near historic peak due to easing tariff tensions

Gold prices on Monday retreated from the record high of $3,245 an ounce reached earlier in the morning session. The pullback came after softening trade rhetoric between the US and China, particularly after Trump exempted smartphones and computers from new tariffs.

The White House announced these tariff exceptions on Friday. Then, on Sunday, Trump indicated his willingness to temporarily exempt imports of consumer electronics from duties.

Historically, gold has been investors' go-to safe haven during times of inflation and economic turmoil. On Friday, amid an escalating trade confrontation that triggered a sell-off in global markets, the metal surpassed $3,200 per ounce for the first time.

Meanwhile, Goldman Sachs has raised its gold price forecast for the end of 2025 from $3,300 to $3,700 an ounce, citing rising demand from central banks and increased inflows into gold-backed ETFs.

Traders also anticipate a decrease of approximately 80 basis points in US interest rates through the end of 2025. This scenario is advantageous for gold, as the non-yielding asset benefits from low rates, potentially driving its continued rise.