Gold prices rebounded on Wednesday after hitting a one-week low in the previous session, as growing uncertainties stemming from US President Donald Trump’s tariff plans dampened risk appetite and boosted the safe-haven bullion’s demand.
Spot gold gained 0.1% to $2,916.84 an ounce as of 0513 GMT, after falling more than 2% on Tuesday. US gold futures rose 0.4% to $2,930.30.
Trump opened yet another front on Tuesday in his assault on global trade norms, ordering a probe into potential new tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, the power grid and many consumer goods.
The Trump tariff concerns, which are causing this rather lacklustre state of confidence in the US economy from a consumer side of the mindset, are supporting gold, said Kelvin Wong, senior market analyst, Asia Pacific, at OANDA.
Offering further signs that Americans were growing anxious about the potential negative impact of Trump’s policies, US consumer confidence deteriorated at its sharpest pace in 3-1/2 years in February, while 12-month inflation expectations surged.
“It’s hard to make significant monetary policy changes amid such uncertainty,” Richmond Federal Reserve President Tom Barkin said. High inflation may force the Fed to keep interest rates higher, diminishing the non-yielding gold’s appeal.
Fears of Trump’s tariff proposals triggering a major global trade war have helped gold scale record highs several times and gain about 11% this year.
Market players are awaiting the US Personal Consumption Expenditures (PCE) report, the Fed’s preferred inflation gauge, for insights into the central bank’s rate-easing path and monetary policy.
The report is due on Friday.
“If the numbers confirm the underlying fear that inflation is ticking higher again, Fed rate-cutting expectations could be further reined in,” said Tim Waterer, chief market analyst at KCM Trade.
Spot silver rose 0.1% to $31.76 an ounce, platinum fell 0.2% to $964.80 and palladium gained 0.7% at $934.40.
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