Gold Scales New High On Safe-haven Demand

Spot gold traded 1.6 percent higher at $5,083.76 an ounce, after hitting a high of $5,101.10 earlier. U.S. gold futures were up 0.1 percent at $5,126.21.

Escalating trade tensions, U.S. President Donald Trump on Monday said he would raise tariffs on South Korean imports to 25 percent because of a delay in the South Korean legislature approving a trade deal with the United States.

Earlier, Trump threatened 100 percent tariffs on Canadian goods over Canada-China deal.

On the geopolitical front, Iran’s foreign ministry spokesman Esmail Baqaei has issued a clear warning that the Islamic Republic is fully prepared to deliver a “sweeping, regret-inducing response” to any act of aggression.

Investors also braced for a possible U.S. government shutdown over the funding of DHS & ICE amid Minnesota unrest.

The dollar struggled to rebound as traders seemed reluctant to make any significant moves ahead of the Federal Reserve’s monetary policy announcement on Wednesday.

While the Fed is widely expected to leave interest rates unchanged, traders will pay close attention to the accompanying statement for clues about the outlook for rates.

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