Gold prices saw a slight uptick in Asian trade on Tuesday, recovering from overnight losses as traders weighed the potential impact of President-elect Donald Trump’s planned trade tariffs and awaited key inflation data from the U.S.
Spot gold rose by 0.2%, reaching $2,669.41 an ounce, while February gold futures also gained 0.2%, settling at $2,684.85 an ounce by 23:17 ET (04:17 GMT). Despite some safe-haven demand for the precious metal, this was largely counterbalanced by the strength of the U.S. dollar, which remained near two-year highs.
Trump’s Trade Tariffs: A Gradual Approach?
Speculation surrounding Trump’s planned tariffs has played a role in supporting gold demand. Bloomberg reported Monday that Trump’s team is preparing a strategy to impose tariffs gradually over the coming months, though it remains uncertain whether the President-elect will follow through on this plan.
According to the report, tariffs could be increased by 2% to 5% per month, a tactic aimed at giving Washington more leverage in trade negotiations while avoiding an abrupt surge in inflation. This gradual approach has raised concerns among investors, especially with Trump set to take office on January 20.
Although fears of inflation triggered some safe-haven interest in gold, expectations that tariffs may lead to higher inflation and prolonged interest rates dampened sentiment for the yellow metal.
Trump has pledged to impose steep tariffs on imports from day one of his presidency, with the 60% duty on China being a primary concern for markets.
Inflation Data in Focus for Rate Outlook
Markets are now focused on U.S. inflation data, with December’s Consumer Price Index (CPI) report due on Wednesday. Analysts anticipate the data will provide further insights into the Federal Reserve’s future interest rate decisions.
Persistent inflation and strength in the labor market are expected to give the Fed more flexibility to keep rates high, which typically harms non-yielding assets like gold. The prospect of slower rate cuts has supported the dollar, which remained at its highest level in over two years, further weighing on precious metal prices.
Other Precious Metals and Industrial Metals
In other precious metals, platinum futures rose 0.3% to $972.90 an ounce, while silver futures remained stable at $30.315 an ounce.
Among industrial metals, copper prices extended their gains on Tuesday. Continued optimism about demand from China, driven by expected stimulus measures from Beijing, supported copper prices. Benchmark copper futures on the London Metal Exchange climbed 0.5% to $9,139.50 per ton, while March copper futures rose 0.6% to $4.3518 per pound.
Copper was also buoyed by recent data showing a 13-month high in China’s imports of the metal, further solidifying expectations of sustained demand from the world’s top importer.
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