Gold prices inched higher on Tuesday, supported by fears of a global trade war as U.S. President Donald Trump’s new tariffs on imports from Canada and Mexico came into effect, along with a doubling of duties on goods from China.
Spot gold was up 0.2% at $2,898.25 an ounce, as of 0805 GMT, after rising nearly 1% on Monday. U.S. gold futures gained 0.2% to $2,907.90.
“It’s a modest move so far today… The clear deterioration in global trade relations and the weaker U.S. dollar on fears of a sudden slowdown in U.S. growth gave the market a solid boost overnight,” Capital.com’s financial market analyst Kyle Rodda said.
“Markets could drive (gold) prices into the $2,700s before the primary uptrend continues.”
Trump’s tariff actions, which could upend nearly $2.2 trillion in two-way annual U.S. trade, went live at 0501 GMT.
China responded immediately, with additional tariffs of 10%-15% on certain U.S. imports from March 10 and a series of new export restrictions for designated U.S. entities.
Canadian Prime Minister Justin Trudeau said Ottawa would respond with immediate 25% tariffs on $20.7 billion worth of U.S. goods.
JP Morgan said they hold a long-term structural bullish view for gold with a price target close to $3,000 per ounce in the fourth quarter of 2025.
Trump’s tariffs are widely seen as inflationary, and have prompted increased safe-haven flow into bullion, which has gained more than 10% so far this year.
However, higher U.S. inflation may force the Federal Reserve to keep rates higher for longer, which could dent non-yielding gold’s appeal.
Investors are awaiting the ADP employment report on Wednesday and the U.S. non-farm payrolls report on Friday for more hints on the Fed’s rate trajectory.
Spot silver eased 0.1% to $31.65 an ounce, platinum shed 0.5% to $948.60, and palladium slipped 1.2% to $926.75.
