Gold prices steadied on Wednesday after earlier losses. The metal gained support from a weaker U.S. dollar and rising demand for safe-haven assets. This came as markets continued to assess the impact of President Donald Trump’s new tariffs.
Spot gold traded at $2,915.48 an ounce at 0730 GMT. This marked little change after a nearly 1% increase the previous day. Similarly, U.S. gold futures rose 0.2%, reaching $2,926.20. Tim Waterer, Chief Market Analyst at KCM Trade, explained that gold would likely remain in demand as long as international trade uncertainties persist.
On Tuesday, Trump implemented fresh tariffs, including a 25% tariff on imports from Mexico and Canada. The tariffs also included a rise in duties on Chinese goods, now set at 20%. These moves have fueled concerns about trade wars that could harm economic growth. At the same time, they could increase prices for American consumers still dealing with inflation.
In response, China and Canada imposed retaliatory tariffs on U.S. goods. Mexico is expected to follow suit by Sunday. U.S. Federal Reserve Bank President John Williams commented that the tariffs would likely drive inflation higher. However, he also noted that the current interest rate policy was adequate and did not require changes.
Trump’s trade policies have caused growing economic uncertainty, which has, in turn, boosted gold prices. Gold has risen more than 10% this year due to these concerns. Yet, higher interest rates could eventually diminish gold’s appeal. The market now watches closely for the ADP employment report later today and U.S. nonfarm payroll data due on Friday.
In other news, China, the world’s top metals consumer, has announced more fiscal stimulus. This aims to boost consumption and help meet the country’s growth target of approximately 5% for this year. Along with gold, other metals like silver, platinum, and palladium saw increases. Spot silver gained 0.6%, platinum rose 1.1%, and palladium added 1.4%.
In conclusion, gold prices held steady amidst growing concerns about Trump’s tariffs and their potential economic impact. As uncertainties continue, the demand for gold is expected to remain strong, especially as markets monitor the ongoing trade tensions.
