Gold holds steady with all eyes on Trump’s tariff plans
GOLD prices held steady on Tuesday (Mar 4) as market participants fretted that US President Donald Trump’s tariffs on Canada and Mexico will fuel inflation and hinder economic growth.
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 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.
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.
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.
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.
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. REUTERS
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