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Gold prices remained largely unchanged in Asian trading on Tuesday, with safe-haven demand providing support amid escalating trade tensions. The market reacted to the implementation of U.S. tariffs on Mexico and Canada, alongside further tariff escalations against China.
As of 00:23 ET (05:23 GMT), Spot Gold was steady at $2,892.98 per ounce, while Gold Futures for April delivery edged up 0.1% to $2,903.87 an ounce.
Gold Supported by Rising Trade Tensions
At 5:01 GMT on Tuesday, the U.S. implemented 25% tariffs on imports from Mexico and Canada, part of President Donald Trump’s broader trade strategy aimed at addressing illegal immigration and drug trafficking concerns.
Additionally, Trump signed an order on Monday to increase levies on Chinese goods from 10% to 20%, following an initial tariff hike on February 4.
In response, China announced retaliatory tariffs on U.S. goods, imposing 15% duties on several agricultural products. China’s Commerce Ministry also added 15 U.S. entities to an export control list and designated 10 American firms as “unreliable entities,” with these restrictions set to take effect on March 10.
Market Reaction: Equities Decline, Safe-Haven Demand Rises
The escalating trade war has triggered significant downturns in global equity markets.
- Japan’s Nikkei 225 and Hong Kong’s Hang Seng posted sharp losses.
- In the U.S., the Dow Jones Industrial Average fell 1.5%, while the NASDAQ Composite plunged 2.6%, and the S&P 500 dropped 1.8% on Monday.
Gold’s status as a safe-haven asset helped keep prices stable, as investors sought refuge from market volatility.
Other Precious Metals Muted Amid Dollar Stability
- Platinum Futures dipped 0.1% to $969.20 per ounce.
- Silver Futures edged 0.2% lower to $32.269 per ounce.
- The U.S. dollar remained steady, contributing to the subdued movement in precious metals.
Copper Prices Slip as Traders Await China’s Economic Policies
Copper prices edged lower on Tuesday, pressured by the uncertainty surrounding Trump’s tariff policies and their potential impact on industrial demand.
Markets are also closely watching China’s upcoming Two Sessions parliamentary meetings, where policymakers may unveil economic stimulus measures to support domestic demand. Increased infrastructure spending and industrial activity in China—the world’s largest copper consumer—could significantly boost copper demand.
- Benchmark Copper Futures on the London Metal Exchange fell 0.2% to $9,395.45 per ton.
- April Copper Futures were unchanged at $4.895 per pound.
Outlook: Gold Remains Resilient as Trade War Escalates
While gold prices have held firm amid rising geopolitical and economic uncertainty, continued equity market losses, a weaker dollar, and potential further retaliation from China could drive stronger safe-haven demand for bullion. Meanwhile, investors will closely monitor developments from China’s economic meetings to gauge the outlook for industrial metals like copper.
