Online Reporter
Gold was steady near a record high after President Donald Trump imposed 10 percent tariffs on China, buoying haven demand.
Beijing hit back immediately with a range of levies on US products, and also announced an investigation into Google for alleged antitrust violations.
The trade war with China comes after Trump threatened to impose 25 percent tariffs on Canada and Mexico, before announcing he was pausing them by a month.
Bullion was trading fairly close to the all-time peak above US$2,830 an ounce reached on Monday.
There’s plenty of uneasiness about what lies ahead, burnishing gold’s appeal as a store of value in a hard-to-predict environment.
How far the dollar rises will be important, as a strengthening US currency makes bullion more expensive for many buyers.
Among the biggest questions are how resilient the US and Chinese economies would be to a trade war, as well as the ripple-on effects for monetary policy if tariffs reignite inflation. The Federal Reserve paused rate cuts last month, adopting a “wait-and-see” approach with regards to the new administration’s policies.
Spot gold was steady at US$2,814.42 an ounce in Singapore.
The Bloomberg Dollar Spot Index was little changed after rising 1.1 percent over the previous six sessions. Silver dipped, platinum was flat and palladium advanced.
Trade war fears had jolted precious metals markets even before Trump went ahead with the tariffs on China.
US prices of gold and silver have surged above international benchmarks in recent weeks, causing dealers and traders to rush huge volumes of the metals into the US before any tariffs are imposed.
The chaos has also led to a spike in lease rates for gold and silver — the return that holders of bullion in London’s vaults can get by loaning metal out on a short-term basis. — Bloomberg
