Gold prices drop to 3 and a half weeks lowest due to market sell-off

Gold prices fell on Monday, hitting a more than three-week low, as a wave of sell-offs spread across the market, causing investors to sell gold to make up for losses in other investments, amid concerns about a global recession due to the escalating trade war.

At 6:37 GMT, spot gold fell 0.1%, to $3,034.02/ounce. Previously, in the session, gold had a time to decrease by more than 1%, reaching its lowest level since March 13.

Meanwhile, US gold futures rose 0.5% to $3,051 an ounce.

Gold fell more than 3% last Friday, after US President Donald Trump announced stronger-than-expected tax increases, shocking the global market.

In response, China imposed additional tariffs of up to 34% on US goods and limited exports of some rare earth metals.

The market is currently very chaotic and uncertain. Many people have not seen any short-term solution to relieve stress, because the situation is at a very serious level, said IG market strategist Yeap Jun Rong.

The decline in gold prices - which are safe-haven assets during times of uncertainty - has led many to believe that investors are taking profits or selling gold to make up for losses for other assets.

Global recession concerns caused the US stock market to evade nearly $6 trillion last week and sent Japan's Nikkei index down nearly 9% on Monday.

However, the People's Bank of China continued to buy gold, raising its reserves further in March - the fifth consecutive month of increase.

Central banks clearly still have a need to store gold, which continues to support precious metal prices. Central bank purchases could help maintain gold's long-term uptrend, said Tim Waterer, a market analyst at KCM Trade.

For other precious metals, spot silver rose 2% to $30.13 an ounce, after hitting a nearly seven-month low. platinum prices increased by 1% to 926.09 USD/ounce, while palladium increased by nearly 1%, reaching 919.5 USD/ounce.