Gold pauses near record highs as markets eye Trump tariffs, Fed signals
Onome Amuge
Gold prices dipped slightly, Wednesday morning, but remained near record highs, with uncertainty surrounding trade tensions and interest rates propping up demand for the safe-haven asset.
President Donald Trump’s threats to impose more tariffs on key imports fueled concerns over the impact on global trade and economic growth, while investors anxiously awaited cues from the Federal Reserve in the form of the minutes from its January meeting.
Spot gold was down 0.2 percent to $2,929.02 an ounce while gold futures expiring in April dropped 0.1 percent to $2,946.22 an ounce.
In recent sessions, gold prices have steadied around record high levels, with the metal’s haven appeal subdued somewhat in the wake of U.S.-brokered peace treaty talks between Russia and Ukraine.
Despite Trump’s latest tariff threats, markets reacted relatively less negatively, with hopes emerging that these threats would be used as negotiation tactics rather than actual tariffs being imposed.
Trump, on Tuesday, announced his intention to impose tariffs as high as 25 percent on a wide range of imports, including automobiles, pharmaceuticals, and semiconductors.
The U.S president justified his move by claiming unfair trading practices by other major economies, and stated that the tariffs on auto imports could be implemented as early as April, while the tariffs on pharmaceuticals and semiconductors would be delayed to give companies time to establish U.S. operations.
The latest tariff threat announced by Trump is part of his ongoing strategy of using import duties to advance U.S. interests and to enforce a ‘reciprocal’ tariff policy against major U.S. trading partners.
While such threats have historically had negative impacts on financial markets, this time around, market reaction was noticeably more subdued. This reduced response, according to analysts, suggests that investors are becoming somewhat toughened to the prospect of increased trade tensions, perhaps due to their growing confidence in the resilience of the U.S. economy, or to their belief that the threats may not fully materialise.
While gold prices held steady near record highs, other precious metals registered declines on Wednesday. Platinum futures slid nearly one percent to $1,000.95 an ounce. Silver futures also retreated, with the white metal shedding 0.1 percent to $33.325 an ounce.