Gold plunges on trade tensions and recession fears

Gold prices crashed by 0.3% on Monday, hitting a three-week low in morning trading. The market faced mounting pressure from a broad sell-off in assets, fueled by rising fears of a global recession amid escalating trade tensions.

On Friday, gold saw a significant drop of over 3% after US President Donald Trump's unexpectedly harsh tariffs sparked bearish sentiment in global markets. Despite its safe-haven status, the yellow metal was also hit by profit-taking and heightened volatility. 

Further market strain came from China's tit-for-tat tariffs, as Beijing announced a 34% duty on American goods and imposed restrictions on rare earth metal exports in response to Washington's measures.

Fears that the US economy is slipping into recession wiped nearly $6 trillion off US stocks last week.

Jerome Powell, who heads the Federal Reserve, emphasized higher tariffs to pose a greater risk of inflation and economic slowdown, making the central bank's job more difficult in the current context, Reuters reported.