As a result, spot gold was down by 0.1 per cent hitting $3,232.45 an ounce. The yellow metal had hit a record high of $3,245.42 earlier. Meanwhile, US gold futures edged 0.1 per cent higher to $3,248.20.

Also Read: Goldman Sachs cuts targets on China stocks for 2nd time in a month over trade tensions

“Softer US dollar has been assisting gold, but news of tech product tariff exemptions lifted risk appetite and caused safe-haven demand to ease,” A report by news agency Reuters quoted KCM Trade chief market analyst Tim Waterer as having said. “This has caused gold to lack clear direction.”

Trump's tariff exemptions

The White House had announced on Friday, the exclusions from the steep reciprocal tariffs. However, Trump said on Sunday that the exclusion of smartphones and computers from his reciprocal tariffs on China will be short-lived.

As a result, gold prices on Friday vaulted over the $3,200-per-ounce mark for the first time.

Also Read: EU trade deal talks: Piyush Goyal lashes out at non-trade barriers in EU

This is because non-yielding gold has traditionally been viewed as a hedge against economic uncertainty and inflation.

Goldman Sachs even raised its end-2025 gold price forecast to $3,700 per ounce from $3,300, citing stronger-than-expected central bank demand and boosted ETF inflows, according to the report.

"Ongoing trade and tariff dramas have created higher volatility and uncertainty levels in financial markets, and in such an environment the gold price could be eyeing off a run towards $3,300 in the near term should dollar weakness persist," Waterer added.

Also Read: US senators urge insider trading probe into Trump after tariff U-turn sparks market surge

On top of this, gold traders forecast around 80 basis points worth of interest rate cuts globally by the end of 2025, as per the report. Gold usually tends to thrive in a low-interest-rate environment.