Gold Prices Remain Steady Amid Trade War Concerns
Gold prices have stabilized in early trading on Friday, positioning the metal for a potential seventh consecutive week of gains. This trend arises amidst escalating fears of a global trade war, largely triggered by U.S. President Donald Trump’s intention to impose tariffs on countries that levy customs duties on American imports.
As of 0040 GMT, gold was trading at $2,929.02 per ounce, nearing its recent peak of $2,942.70 reached earlier in the week. U.S. gold futures experienced a rise of 0.4%, settling at $2,957.50.
President Trump has directed his economic team to formulate plans for imposing tariffs on nations that impose fees on U.S. imports, specifically targeting countries such as China, Japan, South Korea, and members of the European Union.
Recent data indicates a significant uptick in the U.S. Producer Price Index (PPI) for January, coinciding with a consumer inflation report released on Wednesday, which revealed that consumer prices are increasing at the fastest rate in nearly a year and a half. This inflationary pressure has led to heightened expectations in the market that the Federal Reserve will refrain from cutting interest rates until at least the latter half of the year.
During his recent congressional testimony, Federal Reserve Chair Jerome Powell reiterated that the central bank is not in a rush to reduce interest rates. While gold is commonly viewed as a hedge against inflation and economic uncertainty, its appeal may be diminished in an environment characterized by elevated interest rates.
Other Precious Metals Performance
In other precious metals trading, silver experienced a slight decline, falling by 0.1% to $32.32 per ounce. Conversely, platinum rose by 0.1%, reaching $996.35, while palladium saw a drop of 0.3%, trading at $991.26.
| Metal | Price (in $) | Change (%) |
|---|---|---|
| Gold | 2,929.02 | – |
| Silver | 32.32 | -0.1 |
| Platinum | 996.35 | +0.1 |
| Palladium | 991.26 | -0.3 |
This steady performance of gold and other precious metals amidst geopolitical tensions and economic indicators highlights the ongoing intricate balance between market forces and investor sentiment.