By Daksh Grover
(Reuters) – Gold prices were steady on Tuesday, after a record rally in the previous session, with investors cautious about the potential effects of President Donald Trump’s tariffs and ahead of the U.S. economic data set to be released later this week.
Spot gold gained 0.05% to $2,815.00 per ounce as of 1133 GMT after hitting a record high of $2,830.49 on Monday. [GOL/]
U.S. gold futures fell 0.6% to $2,841.10. Global bullion banks are flying gold to the U.S. from hubs like Dubai and Hong Kong to take advantage of the high premium the U.S. gold futures are commanding over spot prices on tariff concerns.
China imposed tariffs on U.S. imports in a swift response to new U.S. duties, escalating the trade war between the world’s top two economies even as Trump offered reprieves to Mexico and Canada.
“It (Mexico and Canada tariff pause) does not remove the fact that global markets remain troubled by the prospect of trade wars that may boost prices while lowering the economic outlook,” said Ole Hansen, head of commodity strategy at Saxo Bank.
The Trump administration’s plans for trade tariffs come with inflation risks, three Fed officials warned on Monday, with one arguing that uncertainty over the outlook for prices calls for slower interest rate cuts than otherwise.
Bullion is traditionally considered a hedge against both inflation and geopolitical uncertainty, but higher rates reduce the non-yielding asset’s appeal.
Markets will also closely watch key data this week, including U.S. job openings expected at 1500 GMT, the ADP employment report on Wednesday and the payrolls report on Friday, along with speeches from several Fed officials.
“For now, the tariff focus supersedes any other development given their potential impact on inflation, growth and fiscal stability,” Hansen said.
Spot silver rose 0.2% to $31.63 per ounce. Platinum shed 0.38% to $960.90, and palladium fell 1.5% to $994.08.
Markets in top gold consumer China were closed for the Lunar New Year holidays and will resume trade on Wednesday.
(Reporting by Daksh Grover in Bengaluru; additional reporting by Ishaan Arora; Editing by Shreya Biswas)
