Gold Rallies as Euro Defense Stocks Surge, XRP and Bitcoin Slip from Trump Jump
Monday, 3/03/2025 13:38
GOLD PRICES rose against the Dollar on Monday, the first trading day of March, rallying from last week's sharp drop as Ripple and Bitcoin eased from the weekend's Trump-spurred surge and the US currency weakened against the Euro following a summit of European leaders aimed at securing peace in Ukraine, writes Atsuko Whitehouse at BullionVault.
Having
fallen hard at the end of February but setting new record high month-end and month-average prices, spot gold today rose as much as 0.7% to $2876 per Troy ounce at the start of Asian trading, while the Dollar index – a measure of the US currency's value versus its major peers – fell 0.7%.
Gold priced in Euros fell 0.2% in contrast to €2747 on Monday as the single currency gained 0.9% against the US Dollar on the FX market.
The
UK gold price in Pounds per ounce edged down by 0.1% to £2269.
Following Friday's Oval Office clash between US President Donald Trump and Ukraine President Volodymyr Zelenskyy, Sunday's summit in London saw European leaders agree to step in as an intermediary for brokering a peace deal with Russia, UK Prime Minister Keir Starmer said.
But the UK distanced itself from French President Emmanuel Macron's proposal for a 1-month ceasefire, while Kyiv rejected calls to stop fighting Moscow's invasion – now in its 4th year – without any security guarantees following fresh drone and missile attacks overnight.
So-called digital currency Bitcoin jumped over the weekend after Trump said in a Truth Social post that he has "directed the Presidential Working Group to
move forward on a Crypto Strategic Reserve that includes XRP, SOL, and ADA" – a list to which he added Bitcoin and Ether more than an hour later.
With Ripple today losing a third of Sunday's XRP surge of 31.8%, the price of BTC also eased back after rallying more than 10% on Trump's updated comment to erase almost all of February's 22.7% plunge.
US stock futures pushed higher as European bourses leapt 1.2% on the EuroStoxx 600 index, led by big gains in UK, French and Italian defense stocks plus Germany's wider Dax basket of shares.
Year-to-date the EuroStoxx index has gained over 10% while the USA's S&P500 index has added only 1.2%.
With Trump's threat of trade tariffs against US imports from Europe not yet detailed, a 25% tariff on imports from Canada and Mexico is set to come into effect on Tuesday, although US Commerce Secretary Howard Lutnick hinted that the final rate might be adjusted, describing it as
a "fluid situation".
Gold prices ended Friday with their first weekly decline of the year in US Dollar terms, cutting February's monthly gain to 0.8% after January's 7.8% increase – the biggest since
the 'mini' US banking crisis of March 2023.
"Gold's overdue correction gathered some further momentum ahead of the weekend," says derivatives platform Saxo Bank's commodity strategist Ole Hansen, noting that spiking volatility across markets forced leveraged funds to reduce their exposure across the board.
Latest data show that hedge funds and other leveraged speculators in Comex gold futures and options cut their net bullish betting for the 5th consecutive week over the 5 trading days ending last Tuesday, down to the smallest position since the end of 2024.
In contrast, ETF trust funds backed by physical gold bullion expanded their holdings last week as the number of shares in issue grew.
Across the month, giant
gold ETF the SPDR trust (NYSEArca: GLD) expanded by 4.6% – the largest since Russia began its all-out invasion of Ukraine in early 2022 – while world No.2 gold ETF fund the iShares product (NYSEArca: IAU) saw net investor inflows expand its shares in issue by 4.9%.
That marked the first expansion in four and three months respectively.
"Continued uncertainty – whether it's about tariffs, geopolitical risk, or fears about high government borrowing – could also push speculators to increase their long positions in gold," reckons Lyna Thomas, an analyst at US investment bank Golman Sachs.
The
price of silver – primarily an industrial metal – rose 1.0% against the falling Dollar Monday morning in London, trading at $31.47 per Troy ounce after slipping 1.5% across February but setting
fresh all-time record silver month-average highs in non-US currencies.
Gold prices on the Shanghai Gold Exchange meanwhile continued to show a small premium to London quotes, suggesting positive but weak demand in the world's largest consumer market for the metal.
US President Trump said at the weekend that he will impose another 10% tariff on Chinese goods on Tuesday, effectively doubling the 10% duties imposed on 4 February.
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