Gold Drops as Investors Assess Tariff Impact on US Economy
Gold fell as investors study the latest developments around tariffs and their impact on the US economy and Federal Reserve decisions.
The precious metal was trading at $2,900 an ounce, about $60 short of the all-time high reached last week. Silver also dropped.
There was more movement on the tariff front on Wednesday, with President Donald Trump delaying newly imposed automaker levies on Mexico and Canada by a month. The move saw yields on Treasuries shift toward the lowest level of the year amid mounting investor conviction that a trade-induced growth slowdown will lead the Fed to cut interest rates multiple times in 2025.
The president’s tariffs have sparked retaliation from some nations, creating large swings in equities and keeping investors on edge. Gold and silver — which are both up about 40% since the end of 2023 — have seen more support this year from growing haven appetite.
Silver also benefits from industrial demand, which has outstripped fresh supply for several years. While there is enough mined product in circulation, there are concerns that supplies in London could tighten after Trump’s tariff threats saw traders ship record volumes of the metal to New York warehouses in recent months.
Elsewhere, traders will be parsing nonfarm payrolls data on Friday for any further signs of a slowing labor market, which would boost the odds of more Fed rate cuts. On Wednesday, ADP Research figures showed hiring at US companies slowed in February to the lowest pace since July.
Spot gold fell 0.6% to $2,900.63 an ounce as of 10:35 a.m. in London. The Bloomberg Dollar Spot Index was steady after falling for three days. Silver and platinum and palladium all edged lower.
Source : Bloomberg
