Gold prices remained supported on Monday, as fears of a potential trade war and political uncertainty in Europe boosted demand for safe-haven assets. Risk sentiment waned after U.S. President Donald Trump announced plans on Thursday to impose tariffs of 25% on imported steel and 10% on aluminum, in a move to “protect U.S. industry”. The move sparked concerns over a potential trade war, which would have a negative impact on the U.S. economy, sending the greenback broadly lower. Gold is sensitive to moves in both U.S. rates and the dollar. A weaker dollar makes gold less expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion. Markets were also jittery after Italian elections on Sunday ended in a hung parliamentwith none of the country's three main groups able to rule alone.
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