Uncertainty surrounding Donald Trump’s tariffs sends investors in search of safety amid fear of economic slowdown
25 March 2025 - 07:20
byAnushree Mukherjee and Anjana Anil
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Mounting geopolitical tension and tariff threats continue to drive safe-haven demand for gold. Picture: 123RF
Bengaluru — Gold edged up on Tuesday as uncertainty surrounding US President Donald Trump’s tariffs expected to take effect next week drove safe-haven demand amid the fear of an economic slowdown, trade tension and inflation concerns.
Spot gold was up 0.1% at $3,015.42/oz 4.25am GMT. US gold futures firmed 0.1% to $3,019.40.
“Uncertainty remains over the extent and scope of upcoming US reciprocal tariffs ... gold continues to find some support as a hedge against potential surprises,” said IG market strategist Yeap Jun Rong.
Trump said on Monday car tariffs were coming soon even as he indicated that not all his threatened levies would be imposed on April 2, a move Wall Street took as a sign of flexibility on a matter that has roiled markets for weeks.
Trump’s tariff policies are widely seen as likely to contribute to a slowdown in economic growth, trigger further trade tension and flare inflation.
Atlanta Federal Reserve president Raphael Bostic said he expected slower progress on inflation in the coming months and, as a result, now saw the Fed cutting its benchmark rate only a quarter of a percentage point by year-end.
Bullion, seen as a hedge against geopolitical and economic uncertainty, often thrives in a low-interest-rate environment.
The expectation of rate cuts from the Fed this year, tariff jitters and geopolitical instability have helped gold rise by about 15% so far in 2025.
Markets will next look to the personal consumption expenditures index, the Fed’s preferred inflation measure, due on Friday.
Meanwhile, funds that invest in gold miners are set to attract their largest net monthly inflows in over a year in March, as record-high gold prices improve firms' profit outlooks and boost cash flow.
Spot silver rose 0.3% to $33.1/oz, platinum eased 0.1% to $973.35 and palladium added 0.3% to $953.78.
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 rises on tariff-fuelled safe-haven demand
Uncertainty surrounding Donald Trump’s tariffs sends investors in search of safety amid fear of economic slowdown
Bengaluru — Gold edged up on Tuesday as uncertainty surrounding US President Donald Trump’s tariffs expected to take effect next week drove safe-haven demand amid the fear of an economic slowdown, trade tension and inflation concerns.
Spot gold was up 0.1% at $3,015.42/oz 4.25am GMT. US gold futures firmed 0.1% to $3,019.40.
“Uncertainty remains over the extent and scope of upcoming US reciprocal tariffs ... gold continues to find some support as a hedge against potential surprises,” said IG market strategist Yeap Jun Rong.
Trump said on Monday car tariffs were coming soon even as he indicated that not all his threatened levies would be imposed on April 2, a move Wall Street took as a sign of flexibility on a matter that has roiled markets for weeks.
Trump’s tariff policies are widely seen as likely to contribute to a slowdown in economic growth, trigger further trade tension and flare inflation.
Atlanta Federal Reserve president Raphael Bostic said he expected slower progress on inflation in the coming months and, as a result, now saw the Fed cutting its benchmark rate only a quarter of a percentage point by year-end.
Bullion, seen as a hedge against geopolitical and economic uncertainty, often thrives in a low-interest-rate environment.
The expectation of rate cuts from the Fed this year, tariff jitters and geopolitical instability have helped gold rise by about 15% so far in 2025.
Markets will next look to the personal consumption expenditures index, the Fed’s preferred inflation measure, due on Friday.
Meanwhile, funds that invest in gold miners are set to attract their largest net monthly inflows in over a year in March, as record-high gold prices improve firms' profit outlooks and boost cash flow.
Spot silver rose 0.3% to $33.1/oz, platinum eased 0.1% to $973.35 and palladium added 0.3% to $953.78.
Reuters
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