Gold rises as concerns grow over Trump’s tariff plans

Gold prices rose on Thursday as US President Donald Trump unveiled plans to impose reciprocal tariffs on countries taxing US imports, heightening global trade concerns.

Spot gold added 0.4% to USD 2,915.76 per ounce as of 01:41 p.m. ET (1841 GMT), moving back towards its record peak of USD 2,942.70 hit on Tuesday. US gold futures settled 0.6% higher at USD 2,945.40.

Trump unveiled a roadmap on Thursday for charging reciprocal tariffs on every country that imposes duties on US imports.

US producer prices in January increased solidly, providing further evidence of rising inflation and bolstering financial market expectations that the Federal Reserve will hold off on any rate cuts until the second half of the year.

“The major factor is political uncertainty and the economic consequences … the PPI was pretty much neutral and it didn’t really have much of an effect on gold, investors around the world are worried about what the Trump policies will do to the overall economy,” said Jeffrey Christian, managing partner of CPM Group.

Federal Reserve Chair Jerome Powell, at his second congressional hearing this week, reiterated that the central bank was in no rush to cut interest rates.

Despite expectations of a market selloff due to recent PPI data, Powell’s testimony, and Trump’s talk about possible Russia-Ukraine peace, the market remains positive due to a flight to safety and traders buying the dip, contradicting these bearish signals, said Bob Haberkorn, senior market strategist at RJO Futures.

Bullion is seen as a hedge against inflation and economic uncertainties, but higher interest rates tarnish the non-yielding asset’s allure.

The dollar index fell 0.5%, making greenback-priced gold less expensive for foreign buyers.

Gold is rising across all major currencies, and the dollar’s slight decline today is providing more room for its strength, Haberkorn said.

A stellar rally that has lifted global gold prices to all-time highs has cast a shadow on jewellery purchases for India’s wedding season, while dealers in China offered discounts to lure buyers.

Spot silver fell 0.2% to USD 32.15 per ounce. Platinum was down 0.1% to USD 991.25 and palladium was up 1.6% to USD 989.50.

(Reporting by Anmol Choubey in Bengaluru; Editing by Rod Nickel and Mohammed Safi Shamsi)