Gold Steady as Traders Brace for Tariffs That Could Spark Trade War
Gold steadied as traders braced for the U.S. to raise tariffs on Chinese goods to as high as 104%, a move Beijing is widely expected to retaliate against as hopes fade that a brutal global trade war can be averted.
President Donald Trump has signaled the U.S. is open to a deal that could reduce or eliminate higher tariffs on dozens of countries as Asian and European leaders announced plans to negotiate with the White House. But he pressed ahead with higher duties on about 60 trading partners, including China, which he called the “worst offender” that will take effect after midnight New York time.
Bullion has eased after record highs that included an all-time high of $3,167.84 an ounce last week, driven by a surge in buying by investors seeking safety on fears a global trade war could trigger an economic downturn. While gold is a safe haven, extreme market disruptions can prompt investors to sell the asset to cover losses elsewhere.
The precious metal still looks to have more upside, having risen more than 13% this year on central bank buying and inflows into exchange-traded funds. Markets are also betting that rising volatility could prompt the Federal Reserve to speed up interest-rate cuts to stave off a recession. Lower rates typically benefit gold, which pays no interest.
Gold for immediate delivery was little changed at $2,980.84 an ounce at 8:59 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.3%. Silver, palladium and platinum declined.
Source: Bloomberg
