Gold prices remained steady on Tuesday, supported by safe-haven demand as U.S. President Donald Trump’s tariffs on Mexico and Canada came into effect, contributing to market uncertainty.
Spot Gold was unchanged at $2,892.98 per ounce, while Gold Futures for April gained 0.1%, reaching $2,903.87 per ounce by 00:23 ET (05:23 GMT).
Tariff Impact
On Tuesday, President Trump’s administration imposed 25% tariffs on imports from Mexico and Canada, in a bid to address concerns over illegal immigration and drug trafficking.
Trump also signed an order on Monday to increase tariffs on Chinese goods from 10% to 20%, a move originally imposed in February.
In retaliation, China announced 15% tariffs on several U.S. agricultural products and added 15 U.S. entities to an export control list and 10 firms to an unreliable entities list, effective March 10.
These tariffs have exacerbated market turmoil, contributing to downturns in global equity markets. Key indices like Japan’s Nikkei 225 and Hong Kong’s Hang Seng suffered substantial losses. In the U.S., the Dow Jones Industrial Average dropped 1.5%, while the NASDAQ Composite plummeted 2.6%, and the S&P 500 fell 1.8% on Monday.
Gold as a Safe-Haven Asset: Despite the turmoil in equity markets, gold has remained steady, maintaining its appeal as a secure investment during times of economic uncertainty. The steady performance of gold indicates its continued status as a safe-haven asset, with investors seeking refuge from the instability created by these tariffs and trade tensions.
Other Precious Metals
Platinum Futures inched 0.1% lower, trading at $969.20 per ounce.
Silver Futures dipped slightly, falling 0.2% to $32.269 per ounce. Both metals showed muted responses as the U.S. dollar remained largely unchanged, reflecting a lack of significant movements in broader financial markets.
Copper Prices Retrench as Market Awaits China’s Economic Stimulus
Copper prices also retreated slightly on Tuesday, with the Trump tariffs continuing to weigh on the red metal.
Investors are closely watching China’s annual “Two Sessions” parliamentary meetings, seeking potential economic stimulus measures to support domestic demand, particularly in infrastructure spending and industrial activity. China’s role as the world’s largest copper consumer makes any shift in its demand highly significant for the metal’s future.
Benchmark Copper Futures on the London Metal Exchange fell 0.2%, trading at $9,395.45 per ton, while April Copper Futures remained unchanged at $4.895 per pound.
Conclusion
Gold prices are holding steady in the face of market volatility caused by the U.S. tariff policies. As tensions continue to rise, with retaliatory measures from China and concerns over global trade, gold’s role as a safe-haven asset remains crucial, especially as investors seek stability amidst global economic uncertainty. Meanwhile, the broader precious metals market remains subdued, reflecting the muted reaction of the U.S. dollar and ongoing trade concerns.
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