April 7 (Reuters) - Gold prices fell on Monday as investors opted for the dollar as a safe haven after sweeping U.S. tariffs raised fears of a global recession.
Analysts, however, remained bullish on bullion given the challenging economic conditions.
Spot gold was down 0.2% at $3,030.69 an ounce as of 09:01 a.m. ET (1301 GMT), after hitting a more than three-week low of $2,971.09 earlier in the session. U.S. gold futures rose 0.5% to $3,048.90.
"Gold retreats as investors turn to cash and other safe havens like the Swiss Franc and the Japanese Yen amid market turmoil, creating a risk of deeper corrections," said Nikos Tzabouras, senior market analyst at Tradu.com.
The dollar rose against its rivals, moving away from a six-month low touched last week. A stronger greenback makes gold more expensive for other currency holders.
Major stock indexes and U.S. share futures plunged, with the S&P 500 poised to confirm a bear market, while volatility gauges spiked as U.S. President Donald Trump showed no sign of backing away from his tariff plans.
"Once the dust settles, the rising recession risks, a weaker dollar, lower real yields and bigger rate cut expectations will all play their part in supporting a rebound (in gold)," said Ole Hansen, head of commodity strategy at Saxo Bank.
Futures now point to around 120 basis points' worth of interest rate cuts by the U.S. Federal Reserve by December, with markets pricing in about a 47% chance of a U.S. rate cut in May.
Lower rates increase the appeal of bullion as it yields no interest.
"Gold's correction remains a relatively shallow one with key support levels holding, most notably the trendline from the January low at $2,975 ahead of the February highs around $2,955," Hansen said.
Gold, used as a safe investment during times of political and financial uncertainty, scaled an all-time peak of $3,167.57 last Thursday, boosted by strong safe-haven inflows amid geopolitical uncertainties and strong central bank demand.
Spot silver rose 2.2% on Monday to $30.19 an ounce recovering from a near seven-month low hit earlier in the day.
Spot platinum edged 0.2% higher to $928.19, while palladium gained 1.5% to $928.19.
Reporting by Brijesh Patel and Anmol Choubey in Bengaluru; Editing by Susan Fenton
