Gold Steady, Market Weighs This Factor!
Gold prices held steady on Wednesday, as market participants explained the impact of US import tariffs and the diminishing likelihood of an imminent interest rate cut. Gold held around $5,150 per ounce, after a 1.6% drop the previous day, ending a four-session rally.
On the monetary policy front, Boston Fed President Susan Collins stated that interest rates are likely to remain unchanged "for some time" as recent data shows improvement in the US labor market. This tone aligns with the minutes of the Fed's January meeting, which indicated that central bank officials remain cautious about cutting rates. High interest rates are typically a drag on gold because the precious metal doesn't provide an unbalanced return.
Nevertheless, gold is considered to remain firmly anchored above $5,000 per ounce, having recovered more than half of the losses incurred in the sharp correction earlier in the month. Support comes from US trade policy and geopolitical risks in the Middle East, including increased US military deployments and the agenda of talks with Iran, which will continue this week.
On the trade front, the Trump administration's 10% across-the-board import tariffs officially took effect on Tuesday, following a Supreme Court ruling overturning the previous "reciprocal" tariff regime. Trump had threatened to raise the tariffs to 15% but had not yet issued a formal directive. The US government has also prepared a national security investigation into several imported commodities, potentially opening the door to additional tariffs. Meanwhile, some importers have begun filing for tariff refunds, which are expected to impact the US budget deficit, the dollar, and the bond market, factors that have also boosted interest in hard assets like gold. (asd)
Source: Newsmaker.id
