Gold Steady as Market Weighs Trade War, U.S. Recession Risks
Gold was steady, supported by safe-haven demand after Wall Street was hammered by President Donald Trump’s on-off tariff plans and his latest comments downplaying fears of a recession.
Bullion, which had fluctuated around $2,900 an ounce during the previous week, was trading near $2,915 on Wednesday as investors weighed Trump’s latest move to ease his trade war threats against Canada just hours after he said he would double tariffs on Canadian steel and aluminum to 50%. The president also downplayed the risk of a recession caused by tariffs.
A series of tepid economic reports in the U.S. have stoked fears of stagflation, where there is a risk of rising inflation as well as a risk of declining economic growth. A slowdown in growth caused by trade could prompt the Federal Reserve to cut interest rates several times this year.
Traders will be assessing inflation readings later Wednesday that could show U.S. consumer prices rose in February. That could complicate the Fed’s rate-cutting agenda, with monetary policy easing generally positive for non-interest-bearing bullion. Elsewhere, markets are watching for potential easing of geopolitical risks that could ease demand for safe-haven assets. Ukraine accepted a U.S. proposal for a 30-day ceasefire with Russia as part of a deal with the Trump administration to lift a freeze on military and intelligence aid to Kyiv. Spot gold was little changed at $2,915.57 an ounce at 10:04 a.m. in London, after ending Tuesday nearly 1% higher. The Bloomberg Dollar Spot Index rose 0.2%. Silver, platinum and palladium rose.--With help from Preeti Soni and Jack Ryan.
Source: Bloomberg
