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Gold prices edged lower in Asian trading on Tuesday but remained close to recent peaks as safe-haven demand stayed strong. This came amid rising global trade tensions, particularly with U.S. President Donald Trump’s renewed tariff threats against Canada, Mexico, and China.
Gold Price Movements (as of 01:03 ET / 06:03 GMT):
- Spot gold declined 0.5% to $2,947.73 per ounce.
- Gold futures (April contracts) fell 0.3% to $2,952.99 per ounce.
- Last week’s record high: $2,956.37 per ounce.
Key Market Drivers:
1. Trump’s Tariff Threats Keep Investors on Edge
- Trump reaffirmed his plan to impose 25% tariffs on Canada and Mexico by next week if no agreement is reached before the March 4 deadline.
- This move could trigger retaliatory tariffs, fueling global trade instability and increasing demand for gold as a safe-haven asset.
2. U.S.-China Trade Tensions Intensify
- Over the weekend, Trump signed a sweeping executive order imposing new restrictions on Chinese trade and investment.
- The U.S. administration is reportedly considering tighter controls on chip exports to China, a move that could escalate the ongoing tech war between Washington and Beijing.
- Beijing has already retaliated with its own tariffs and export controls, raising fears of further trade disruptions.
3. Gold’s Safe-Haven Appeal Strengthened
- Amid worsening trade relations, investors continue to seek refuge in gold, keeping prices elevated despite Tuesday’s slight dip.
- The metal’s resilience suggests that markets remain concerned about the potential impact of U.S. trade policies on global economic stability.
Market Outlook
- Gold prices are likely to remain highly sensitive to further developments in U.S. trade policy and geopolitical tensions.
- If Trump proceeds with new tariffs, gold could surge past its record high of $2,956.37 per ounce.
- However, a softening in trade rhetoric or positive trade negotiations could lead to profit-taking and a short-term pullback in gold prices.
