 "24 karat gold bars are seen at the United States West Point Mint facility in West Point, New York, June 5, 2013. File Imge/Reuters")
Gold remained steady near record highs on Tuesday (February 25), supported by safe-haven demand amid concerns that US President Donald Trump’s tariff plans could lead to inflation and potentially trigger a major global trade war.
As of 0220 GMT, spot gold was little changed at $2,950.39 an ounce, approximately $6 below the all-time high of $2,956.15 reached on Monday (February 24). US gold futures increased by 0.1 per cent to $2,967.40.
Market participants are beginning to reassess tariff risks as the extended deadline for tariffs on Mexico and Canada approaches next week, according to IG market strategist Yeap Jun Rong.
Trump’s tariff threat
Trump said on Monday that tariffs on Canadian and Mexican imports were “on time and on schedule,” despite ongoing efforts by these countries to enhance border security and curb the flow of fentanyl into the US ahead of the March 4 deadline.
In addition, investors and economists anticipate that the US Federal Reserve will respond “strongly and systematically” to changes in inflation and the labor market.
“This week’s lineup of Fed policymakers may deliver some hawkish rhetoric, but with market expectations already pricing in a prolonged rate hold over the next two meetings, the impact on gold prices may be more contained,” Yeap said.
Gold is viewed as a safe investment amid economic and political uncertainties and tends to perform well in a low-interest-rate environment.
Investors are looking forward to the release of the US Personal Consumption Expenditures report, the Fed’s preferred measure of inflation, which will provide insights into the potential path for rate cuts. This report is scheduled for release on Friday.
Meanwhile, India’s gold imports are expected to decline by 85 per cent in February compared to a year earlier, marking the lowest level in two decades due to diminished demand caused by record bullion prices.
Impact Shorts
More ShortsSpot silver rose by 0.3 per cent to $32.45 an ounce. Platinum remained unchanged at $966, while palladium decreased by 0.4 per cent to $936.25.
With inputs from Reuters