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Gold prices extended gains on Tuesday, driven by safe-haven demand as trade conflicts erupted after US President Donald Trump imposed new tariffs on top three trading partners of the world’s biggest economy.
Spot gold rose by 0.8 per cent to $2,917.61 an ounce by 0939 GMT, up for a second straight session. Bullion has gained 10 per cent so far this year and hit a record high of $2,956.15 on February 24.
Read-Gold price rises: Here’s what it means for traders
US gold futures rose by about 1 per cent to $2,928.90.
Trump’s new 25 per cent tariffs on imports from Mexico and Canada took effect at 0501 GMT. He also doubled duties on Chinese goods to 20 per cent. China hit back immediately with additional tariffs of 10-15 per cent on certain US imports from March 10 and a series of new export restrictions for designated US entities.
“With Trump 2.0 delivering exactly the chaos he promised in the US election, Western investors are joining emerging-market central banks in buying gold as an all-weather hedge,” said Adrian Ash, head of research at online marketplace BullionVault.
Traders now await the ADP employment report due on Wednesday and the US nonfarm payrolls report on Friday for clues on the Federal Reserve’s interest-rate trajectory.
“Any indication of a slowdown in the US economy would support calls for more Fed rate cuts and support the gold price. We continue to look gold to re-test the highs over the coming weeks,” UBS analyst Giovanni Staunovo said.
The US central bank held interest rates steady in its last meeting. It is expected to resume cutting rates in June and could reduce short-term borrowing costs again in September.
J.P.Morgan said it expects gold close to $3,000 an ounce by the fourth quarter of 2025.
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