May 6 (Reuters) – Gold prices rose to a two-week high on Tuesday, as tariff threats from U.S. President Donald Trump lifted demand for the safe-haven metal, while the Federal Reserve’s policy decision this week was also in focus.
Spot gold rose 1.2% to $3,374.78 an ounce, as of 1219 GMT, after hitting its highest since April 22 earlier in the session.
U.S. gold futures gained 1.9% to $3,383.90.
“The structural factors that supported gold in recent weeks are all still around – trade tensions are not fixed, concern about the dollar as a reserve currency,” said UBS analyst Giovanni Staunovo.
“We are still looking for gold to retest the $3,500 mark this year.”
On Sunday, Trump announced a 100% tariff on movies produced overseas but disclosed few details on how such a levy would work.
On Monday, the U.S. President said he intends to announce pharmaceutical tariffs within the next two weeks.
Gold, used as a safe store of value during times of political and financial uncertainty, scaled an all-time high of $3,500.05 per ounce last month, boosted by central bank buying, tariff war fears and strong investment demand.
“Gold’s solid rebound from last week’s $3,200 low extended overnight, with prices reaching $3,287 on demand from China, the world’s biggest bullion buyer, following holidays,” Saxo bank said in a note.
Meanwhile, the Fed is widely expected to keep rates steady on Wednesday, but Chair Jerome Powell’s comments will be closely watched for cues on the central bank’s rate trajectory.
Traders are pricing in 75 basis points of rate easing this year with the first move possible in July, LSEG data showed. Lower interest rates decrease the opportunity cost of holding non-yielding bullion.
Elsewhere, spot silver rose 1.6% to $33.01 an ounce, platinum climbed 2% to $978.05 and palladium gained 1.4% to $954.
Reporting by Brijesh Patel and Anushree Mukherjee in Bengaluru; Editing by Eileen Soreng
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