By Anmol Choubey
(Reuters) – Gold prices rose on Tuesday, driven by a weaker dollar and heightened safe-haven demand amid escalating trade conflicts following U.S. President Donald Trump’s imposition of new tariffs.
Spot gold was up 0.6% at $2,911.88 an ounce as of 02:16 a.m. ET (1916 GMT). Bullion has gained nearly 11% so far this year and hit a record high of $2,956.15 on February 24.
U.S. gold futures settled 0.7% higher at $2,920.60.
“The implementation of tariffs brings a high level of uncertainty to the markets, and safe-haven products like gold and silver continue to do well,” said David Meger, director of metals trading at High Ridge Futures.
“The dollar has been under pressure against some of the other major currencies, so that has been supportive as well,” he added.
Trump’s new 25% tariffs on imports from Mexico and Canada took effect at 0501 GMT. He also doubled duties on Chinese goods to 20%. China hit back immediately with additional 10%-15% tariffs on certain U.S. imports from March 10 and a series of new export restrictions for designated U.S. entities.
Canada retaliated with 25% tariffs on C$30 billion worth of U.S. imports with immediate effect on Tuesday.
The U.S. dollar index fell 0.6%, hitting its lowest level since December and making dollar-priced gold less expensive for buyers holding other currencies.
Investors’ focus turns to the ADP employment report due on Wednesday and the U.S. nonfarm payrolls report on Friday for clues on the Federal Reserve’s interest-rate trajectory.
Considering potential economic instability and a weakening job market, there may be a possibility of an earlier-than-expected rate cut by the Fed, Meger said.
Following three rate cuts last year, the Fed has kept rates steady. Market expectations point to a resumption of cuts in June, with a potential further reduction in September.
Spot silver was up 0.6% at $31.88 an ounce, platinum rose 0.9% to $962.30 and palladium rose 0.9% to $946.25.
(Reporting by Anmol Choubey in Bengaluru; Editing by Jan Harvey, Christina Fincher and Alan Barona)
