Gold prices edged higher in Asian trade on Tuesday, staying close to recent highs as safe-haven demand remained strong amid renewed fears of a U.S.-China trade war.
The metal saw gains in overnight trading, supported by a weaker dollar after U.S. President Donald Trump agreed to delay the implementation of 25% tariffs on Canada and Mexico for 30 days.
However, no such reprieve was granted to China, as a 10% tariff on Chinese goods took effect on Tuesday. In response, China imposed retaliatory tariffs, introduced export controls on certain metals, added more U.S. firms to its list of unreliable entities, and launched an antitrust investigation into Google (NASDAQ:GOOGL).
The dollar recovered sharply after the China tariffs were enforced, capping further gains in gold.
Gold Holds Near Record Highs Amid Trade War Concerns
Spot gold inched up to $2,815.35 an ounce, while March gold futures slipped 0.4% to $2,846.64 an ounce. Spot prices remained close to last week’s record high of $2,831.70 an ounce.
Gold’s recent rally has been largely fueled by concerns over a global trade war triggered by Trump’s tariff policies. While the delay on Canadian and Mexican tariffs provided some relief, China remains a crucial U.S. trading partner, and the new tariffs on Chinese goods could have a significant impact on the global economy.
Tariffs Drive Inflation Worries, Limiting Gold’s Gains
Beijing’s retaliatory measures may provoke further escalation from Trump, who had warned against any countermeasures.
While gold continued to attract safe-haven demand, its longer-term outlook remained uncertain due to potential U.S. inflation and interest rate hikes. Analysts and Federal Reserve officials cautioned that the trade tariffs—ultimately paid by U.S. importers—could drive domestic inflation, leading to higher interest rates. The dollar surged on these expectations, nearing a two-year high, which in turn limited gold’s upside.
Other precious metals also faced pressure. Platinum futures dipped 0.1% to $1,002.05 an ounce, while silver futures fell 0.5% to $32.350 an ounce.
Industrial Metals Show Mixed Performance
In the industrial metals market, copper futures on the London Metal Exchange rose 0.2% to $9,150.15 per ton, while April copper futures edged down 0.1% to $4.3250 per pound.
Traders are now watching for potential economic support measures from China—the world’s largest copper importer—to counterbalance the impact of U.S. trade tariffs.
