Gold slips as Treasury yields climb; Trump tariff moves on radar

GOLD prices inched lower on Wednesday (Mar 5), pressured by rising US Treasury yields, while investors tracked developments surrounding the possible impact of US President Donald Trump’s tariffs on inflation and global trade.

Spot gold slipped 0.1 per cent to US$2,916.09 an ounce as at 0028 GMT, while US gold futures edged up 0.2 per cent to US$2,926.10.

The benchmark 10-year US Treasury yield rebounded from an over four-month low hit in the previous session, reducing the appeal of non-yielding gold.

Trump’s new 25 per cent tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20 per cent, sparking trade wars that could slam economic growth and lift prices for Americans still smarting from years of high inflation.

In response to Trump’s newly imposed tariffs, China and Canada retaliated with their own set of tariffs on a range of US goods.

Federal Reserve Bank of New York president John Williams said on Tuesday that the US tariffs will likely drive inflation higher, but believes the current interest rate policy is appropriate and does not need changes.

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Gold holds steady with all eyes on Trump’s tariff plans

The Fed has kept rates steady, after three cuts last year. However, market expectation hint at more cuts in June, with a potential further reduction in September.

Markets now await the ADP employment report due later in the day and the US nonfarm payrolls report on Friday for more insights on Fed’s monetary policy plans.

Spot silver eased 0.2 per cent to US$31.90 an ounce, platinum lost 0.2 per cent to US$958.75 and palladium slipped 0.3 per cent to US$939.00. REUTERS