Gold Prices Steady as Trump’s Tariffs Fuel Inflation Fears
Spot gold was steady at US$2,892.64 an ounce, as at 0017 GMT. US gold futures were little changed at US$2,902.90.
Trump’s Tariffs Stoking Fears of Trade War
US President Donald Trump said on Monday that 25 per cent tariffs on goods from Mexico and Canada will take effect on Tuesday, stoking fears of a trade war in North America and sending financial markets reeling.
Trump also said reciprocal tariffs would take effect on Apr 2 on countries that impose duties on US products, and reaffirmed that he will increase tariffs on all Chinese imports to 20 per cent from the previous 10 per cent levy.
Inflation and Interest Rates
Higher inflation may force the Federal Reserve to keep rates higher for longer, which would dent non-yielding gold’s appeal.
St Louis Federal Reserve president Alberto Musalem said on Monday he expects the US economy to continue to expand this year, but recent weaker-than-expected consumption and housing data and reports from business contacts have raised concerns about possible risks to growth.
Market Outlook
Markets are now awaiting ADP employment report due on Wednesday and the US non-farm payrolls report due on Friday for more hints on the Fed’s rate trajectory.
Gold Outlook
JPMorgan in a note said they hold a long-term structural bullish view for gold with price target of close to US$3,000/oz in the fourth-quarter of 2025.
Other Precious Metals
Spot silver was unchanged at US$31.67 an ounce, platinum lost 0.2 per cent to US$951.60 and palladium slipped 0.3 per cent to US$934.89.
Conclusion
Gold prices remained steady as market participants fretted over the potential impact of US President Donald Trump’s tariffs on Canada and Mexico, which could fuel inflation and hinder economic growth.
FAQs
Q: What was the price of gold at 0017 GMT?
A: US$2,892.64 an ounce.
Q: What is the impact of Trump’s tariffs on the global economy?
A: The tariffs may fuel inflation and hinder economic growth, leading to a potential increase in interest rates.
Q: What is the outlook for gold prices?
A: JPMorgan expects a long-term structural bullish view for gold with a price target of close to US$3,000/oz in the fourth-quarter of 2025.
Q: What is the current price of silver, platinum, and palladium?
A: US$31.67 an ounce, US$951.60, and US$934.89, respectively.
