Gold prices moved higher in Asian trade on Tuesday. The rise came after a steep fall in the previous session. Traders appeared to slow down their selling as year end profit taking eased. Many also took time to reassess global tensions.
Spot gold rose 0.7% to $4,362.30 an ounce early in the day. U.S. gold futures for February climbed 0.8% to $4,378.75 an ounce.
Gold had hit a record high of $4,549.71 an ounce last Friday. Prices dropped sharply on Monday as traders locked in profits after the strong rally.
Other precious metals also saw pressure earlier. Silver and platinum had jumped to record or multi year highs along with gold. Both fell heavily on Monday as traders exited their positions.
Despite the pullback, the overall backdrop for gold remains supportive. Global tensions are still high. The U.S. dollar remains weak. Expectations of interest rate cuts in 2026 continue to help bullion.
Geopolitical worries stayed in focus. Russian President Vladimir Putin said Russia would rethink its position on Ukraine after what he described as drone attacks near his residence. This added more uncertainty to already struggling peace efforts led by the U.S.
These comments raised fears that the war could drag on longer. This tends to support demand for safe haven assets like gold.
Tensions in the Middle East also played a role. U.S. President Donald Trump said the U.S. would strike Iran again if it tried to rebuild its nuclear program.
Risk sentiment in Asia was further tested after China carried out around 10 hours of live firing military drills near Taiwan on Tuesday.
Gold has been one of the best performing assets this year. Investors have turned to it as protection against geopolitical stress and inflation. A weaker dollar has also added support.
Lower interest rate expectations have helped too. Traders believe the Federal Reserve could cut rates further in 2026. Lower rates make gold more attractive since it does not pay interest.
Monday’s sharp fall was seen as a natural pause after a long rally. Thin trading volumes at the end of the year have also made price moves more extreme.
Investors are now waiting for the Federal Reserve meeting minutes due later on Tuesday. These notes could offer clues on inflation, growth, and future rate decisions.
Silver and platinum also bounced back on Tuesday. Silver rose nearly 3% to $74.32 an ounce after dropping from its record high of $83.62. Platinum climbed 2.1% to $2,154.60 an ounce after falling 14% a day earlier.
Copper prices also moved higher. London copper futures gained 2.4% to $12,501.20 a ton. U.S. copper futures rose 2.5% to $5.71 a pound.
