Gold prices edge higher amid speculation over rates, Trump tariffs
2025.01.14 00:09
Investing.com– Gold prices rose slightly in Asian trade on Tuesday, steadying from overnight losses as traders speculated over just how severe President-elect Donald Trump’s planned trade tariffs will be.
Markets were also awaiting more cues on U.S. interest rates from key inflation data due this week, with the dollar remaining near two-year highs in anticipation of the print. This trend pressured gold and other precious metals.
rose 0.2% to $2,669.41 an ounce, while expiring in February rose 0.2% to $2,684.85 an ounce by 23:17 ET (04:17 GMT).
The yellow metal saw some safe haven demand this week, although this was largely offset by continued resilience in the .
Trump trade tariffs could be gradual, report says
Trump’s team is preparing a plan for a gradual imposition of trade tariffs in the coming months, Bloomberg reported on Monday, although it was unclear whether the President-elect will follow through on the plan.
The plan will involve tariff increases of between 2% to 5% every month, and will give Washington more leverage in trade negotiations, while also preventing a sudden spike in inflation due to the duties.
Concerns over Trump’s tariffs had driven some safe haven demand for gold, especially as he prepares to take office on January 20.
But this was largely offset by concerns that the tariffs will also factor into higher inflation, keeping interest rates underpinned for longer.
Trump has vowed to impose steep import tariffs from “day one” of his presidency, with a promised 60% duty on China being the biggest point of concern.
Inflation data awaited for more rate cues
Focus this week is squarely on inflation data for December, due on Wednesday, which is expected to provide more cues on interest rates.
Sticky inflation and strength in the labor market is expected to give the Federal Reserve more headroom to keep interest rates high- a trend that bodes poorly for non-yielding assets such as gold and other metals.
Expectations of slower rate cuts put the dollar at an over two-year high this week, further pressuring metal prices.
Among other precious metals, rose 0.3% to $972.90 an ounce, while steadied at $30.315 an ounce.
Among industrial metals, copper prices extended gains on Tuesday, benefiting from sustained bets that demand in top importer China will improve on the back of bumper stimulus measures from Beijing.
Benchmark on the London Metal Exchange rose 0.5% to $9,139.50 a ton, while March rose 0.6% to $4.351 8 a pound.
Copper was also buoyed by data this week showing continued resilience in China’s imports of the red metal, which hit a 13-month high in December.
