Gold prices declined on Tuesday as markets prepared for the impact of the tariffs imposed by U.S. President Donald Trump on Canada, Mexico, and China.
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Spot gold fell by 0.1%, reaching $2,892.00 per ounce by 05:36 GMT, while U.S. gold futures stabilized at $2,902.20.
Kyle Rodda, a market analyst at Capital.com, stated, “This decline is part of a broader corrective move that could push prices toward the $2,700 range before the overall upward trend resumes.”
Rodda pointed out that deteriorating global trade relations and a weaker dollar due to concerns about a slowdown in U.S. growth had supported gold’s gains in the previous session.
Trump's new tariffs took effect on Tuesday, with the U.S. imposing 25% tariffs on imports from Mexico and Canada, while doubling the tariffs on Chinese goods to 20%, triggering a new round of trade disputes with America’s top three trading partners.
China immediately responded by imposing additional tariffs ranging from 10% to 15% on some U.S. imports starting March 10, alongside new export restrictions on specific U.S. entities.
Trump’s tariffs are widely seen as inflationary, driving investors toward gold as a safe-haven asset, with prices having risen by about 10% since the start of the year.
However, rising inflation could compel the U.S. Federal Reserve to keep interest rates higher for longer, potentially reducing gold’s appeal since it yields no returns.
Investors are awaiting the U.S. private-sector employment report (ADP) on Wednesday, and the non-farm payrolls report on Friday, for clues about the direction of Federal Reserve interest rates.
JPMorgan stated that it remains bullish on gold in the long term, forecasting the price to reach around $3,000 per ounce by Q4 2025.
Spot silver rose by 0.1%, reaching $31.71 per ounce, platinum gained 0.2% to $955.42, while palladium fell by 0.8% to $930.64.
Meanwhile, U.S. stocks dropped on Monday after Trump announced the new tariffs, with the Dow Jones falling by about 1.5%, and the S&P 500 losing more than 1.75%. (Agencies)
