GOLD prices hovered near a record high on Tuesday (Feb 25), supported by safe-haven demand amid concerns over US President Donald Trump’s tariff plans which could fuel inflation and escalate a global trade war.
Spot gold was little changed at US$2,949.46 an ounce as at 0105 GMT, about US$7 shy of the all-time high of US$2,956.15 scaled in the previous session.
US gold futures steadied at US$2,965.
Trump on Monday said that tariffs on Canadian and Mexican imports are “on time and on schedule” despite efforts by the countries to beef up border security and halt the flow of fentanyl into the US ahead of a Mar 4 deadline.
Investors and economists expect the US Federal Reserve to respond “strongly and systematically” to changes in inflation and the labour market, according to research published on Monday by the San Francisco Fed.
Traders are keeping a close tab on the Fed’s interest rate trajectory for clues, as Trump’s policies are viewed as inflationary.
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Gold is considered a safe investment during uncertainties. However, if higher inflation forces the Fed to maintain rates higher for longer, gold’s appeal as a non-yielding asset will decrease.
Investors will watch Friday’s US Personal Consumption Expenditures report, the Fed’s preferred inflation gauge.
On the geopolitical front, Trump and French President Emmanuel Macron displayed stark differences in their approach to Ukraine, exposing a divide between the United States and Europe over Trump’s bid for a quick ceasefire deal with Russia.
Elsewhere, India’s gold imports are set to tumble 85 per cent in February from year-ago levels to their lowest in 20 years, with demand sapped by record prices for the precious metal. India is the world’s second-biggest consumer of bullion.
Spot silver shed 0.3 per cent to US$32.27 an ounce, platinum dropped 0.3 per cent to US$963.35, and palladium was 0.3 per cent lower at US$937.27. REUTERS
