Gold Prices Fall As US Dollar Strengthens Amid Rising Treasury Yields
Gold prices snapped a two-day winning streak on Wednesday (3/5) as rising US Treasury yields weighed on non-yielding assets. However, the precious metal could receive support from safe-haven demand amid the imposition of US tariffs. Trump’s 25% levies on Mexican and Canadian imports took effect on Tuesday, along with a hike in Chinese tariffs to 20%, escalating trade tensions and prompting retaliation.
However, US Commerce Secretary Howard Lutnick suggested in an interview with Fox News that Trump could reconsider his tariff policy less than 48 hours after its implementation. He noted that if USMCA rules were followed, relief could be offered. However, the New York Times reported that Trump has privately signaled that he intends to keep the tariffs.
Safe-haven gold attracted buyers as the US halted military aid to Ukraine. Bloomberg quoted a defense official as saying that all US military equipment not already in Ukraine would be halted, including weapons already in transit via planes and ships, as well as weapons waiting in transit areas in Poland. On Friday, tensions escalated between US President Donald Trump and Ukrainian leader Volodymyr Zelenskyy during peace talks.
Source: FXStreet