Gold Prices Surge Amid Trade War Escalation and Risk Aversion
Gold prices continued to rise on Tuesday as the global trade situation deteriorated. New tariffs imposed by Donald Trump’s administration against China, Canada, and Mexico have increased demand for safe-haven assets, driving up the price of gold.
Spot gold rose 0.92%, reaching $2,920 per ounce as of 12:35 Moscow time. Futures climbed 1.03%, hitting $2,930. On Monday, the metal had already gained nearly 1%.
According to Capital.com analyst Kyle Rodda, worsening trade relations between the world’s largest economies and a weakening U.S. dollar have created favorable conditions for gold’s growth.
Trade War Escalation
China responded to the new U.S. tariffs by announcing 10%-15% duties on a range of American goods, set to take effect on March 10. Additionally, Beijing introduced export restrictions for several U.S. companies.
Canadian Prime Minister Justin Trudeau announced an immediate response to Washington’s measures by imposing 25% tariffs on $20.7 billion worth of U.S. goods.
Gold Outlook
JPMorgan analysts maintain a positive long-term outlook for gold. The bank expects the metal’s price to approach $3,000 per ounce by Q4 2025.
Gold has gained over 10% since the beginning of the year as investors seek refuge from rising geopolitical instability and inflation risks.
However, analysts warn that if inflation remains high, the U.S. Federal Reserve may keep interest rates elevated for longer than expected. This could reduce gold’s appeal, as it traditionally competes with interest-bearing assets.
Other Metals
- Spot silver declined 0.1% to $31.65 per ounce.
- Platinum fell 0.5% to $948.60.
- Palladium dropped 1.2% to $926.75.
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