Gold prices climbed on Monday as an escalation in the Russian war in Ukraine and US President Donald Trump's fresh threat to double tariffs on imported steel and aluminium prompted investors to seek refuge in safe-haven bullion.

Spot gold was up 0.5 per cent at $3,305.85 an ounce, as of 0204 GMT. US gold futures rose 0.4 per cent to $3,329.80.

"With trade and geopolitical worries bubbling to the surface once again, it's no surprise to see gold ticking higher to start the week," said Tim Waterer, chief market analyst at KCM Trade.

"Risk assets are on the backfoot to start the week while a dip in the dollar is also keeping gold supported."

Trump said on Friday that he plans to raise tariffs on imported steel and aluminium to 50 per cent from 25 per cent, prompting the European Commission to warn that Europe is prepared to retaliate.

Ukraine and Russia escalated hostilities ahead of their second round of peace talks in Istanbul, with a wave of attacks that included one of Ukraine's boldest strikes of the war and an overnight drone assault by Russia.

The US dollar index edged 0.2 per cent lower, making bullion less expensive for overseas buyers.

Markets are awaiting speeches from several US Federal Reserve officials this week for cues on the monetary policy outlook, with Fed Chair Jerome Powell set to speak later in the day.

Fed Governor Christopher Waller said that interest rate cuts remain possible later this year even as the Trump administration's tariff regime is likely to push up price pressures temporarily.

Gold, which is considered as a safe-haven asset during the time of geopolitical and economic uncertainty, tends to thrive in low-interest rate environment.

Meanwhile, Trump and Chinese President Xi Jinping are expected to speak soon to iron out trade issues including a dispute over critical minerals, according to Treasury Secretary Scott Bessent on Sunday.

Elsewhere, spot silver was steady at $32.99 an ounce, platinum was down 0.6 per cent at $1,049.72 and palladium fell 0.5 per cent to $965.77.

Published on June 2, 2025