Gold Gains After Pullback as Trump Tariffs Stoke Economic Fears
Gold rose after last week’s sharp correction, with investors weighing the economic outlook as US President Donald Trump prepares to implement import levies against key trade partners.
Bullion traded near $2,870 an ounce, after notching its first weekly loss of 2025 as some traders booked profits following a record-breaking start to the year. Trump is on the verge of hitting Canada and Mexico with 25% tariffs as soon as this week, and is planning on doubling a levy on China. There’s increasing concern the moves will undermine an economy that already showing signs of cooling — a scenario that underscores the precious metal’s haven status.
The resurgence of fears about the health of the economy have boosted market expectations for Federal Reserve interest-rate cuts, also adding to bullion’s appeal as a non-yielding asset.
At the same time, investors are still concerned about inflation, as Trump’s proposed tariffs threaten to keep price pressures elevated — a view that saw the dollar surge last week. A stronger greenback makes gold more expensive for foreign investors, as it is priced in the currency.
Recent US data has stoked fears the US may be entering a period of so-called stagflation — when an economy faces both tepid growth and elevated inflation. That could add support to gold, which is among assets that benefit as a store of value in uncertain times.
Spot gold rose 0.4% to $2,870.26 an ounce at 8:02 a.m. in Singapore, after ending last week down 2.7%. The Bloomberg Dollar Spot Index eased 0.1%. Silver, platinum and palladium all climbed.
Source : Bloomberg
