Trade wars could knock economic growth and lift prices for Americans still smarting from years of high inflation
05 March 2025 - 09:14
byAnjana Anil and Anushree Mukherjee
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Bengaluru — Gold declined on Wednesday, pressured by firmer dollar and treasury yields, while markets continued to track possible effects of US President Donald Trump’s fresh tariffs.
Spot gold fell 0.2% to $2,912.09/oz by 5.31am GMT after rising nearly 1% on Tuesday, while US gold futures firmed 0.1% to $2,922.70.
The dollar firmed, making bullion more expensive for overseas buyers. The benchmark 10-year treasury yields gained, diminishing non-yielding gold’s appeal.
“The US dollar made a mild rebound during Trump’s joint address to Congress, which took some momentum away from the gold price,” said Tim Waterer, chief market analyst at KCM Trade.
“I expect gold will likely remain an in-demand asset while international trade uncertainties remain the prevailing market theme.”
Trump’s fresh 25% tariffs on Mexican and Canadian imports took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, spurring trade wars that could slam economic growth and lift prices for Americans still smarting from years of high inflation.
China and Canada retaliated with their own set of tariffs on a range of US goods, with Mexico expected to respond on Sunday.
Federal Reserve Bank of New York president John Williams said that the US tariffs were likely to drive inflation higher, while adding the current interest rate policy was appropriate and did not need changes.
Despite gold being an inflation hedge, higher rates could tarnish its appeal.
Markets now await the ADP employment report due later in the day and US nonfarm payrolls on Friday.
Meanwhile, top metals consumer China unlocked more fiscal stimulus, signalling greater efforts to boost consumption as a means to ring-fence the economy’s path towards this year's roughly 5% growth target.
Spot silver firmed 0.1% to $32.00/oz, platinum held steady at $960.25 and palladium rose 0.8% to $949.05.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold slips amid tariff turmoil
Trade wars could knock economic growth and lift prices for Americans still smarting from years of high inflation
Bengaluru — Gold declined on Wednesday, pressured by firmer dollar and treasury yields, while markets continued to track possible effects of US President Donald Trump’s fresh tariffs.
Spot gold fell 0.2% to $2,912.09/oz by 5.31am GMT after rising nearly 1% on Tuesday, while US gold futures firmed 0.1% to $2,922.70.
The dollar firmed, making bullion more expensive for overseas buyers. The benchmark 10-year treasury yields gained, diminishing non-yielding gold’s appeal.
“The US dollar made a mild rebound during Trump’s joint address to Congress, which took some momentum away from the gold price,” said Tim Waterer, chief market analyst at KCM Trade.
“I expect gold will likely remain an in-demand asset while international trade uncertainties remain the prevailing market theme.”
Trump’s fresh 25% tariffs on Mexican and Canadian imports took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, spurring trade wars that could slam economic growth and lift prices for Americans still smarting from years of high inflation.
China and Canada retaliated with their own set of tariffs on a range of US goods, with Mexico expected to respond on Sunday.
Federal Reserve Bank of New York president John Williams said that the US tariffs were likely to drive inflation higher, while adding the current interest rate policy was appropriate and did not need changes.
Despite gold being an inflation hedge, higher rates could tarnish its appeal.
Markets now await the ADP employment report due later in the day and US nonfarm payrolls on Friday.
Meanwhile, top metals consumer China unlocked more fiscal stimulus, signalling greater efforts to boost consumption as a means to ring-fence the economy’s path towards this year's roughly 5% growth target.
Spot silver firmed 0.1% to $32.00/oz, platinum held steady at $960.25 and palladium rose 0.8% to $949.05.
Reuters
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