Gold Soars on Safe-Haven Demand After Trump’s Tariffs
Trump’s new 25% tariffs on imports from Mexico and Canada took effect this Tuesday. He also doubled tariffs on Chinese goods to 20%.
Gold prices extended their gains on Tuesday, March 3, driven by safe-haven demand as trade conflicts escalated following U.S. President Donald Trump’s imposition of new tariffs on the country’s three largest trading partners.
Spot gold rose 0.8% to $2,917.61 per ounce, marking its second consecutive session of gains. The metal has climbed 10% so far this year and reached an all-time high of $2,956.15 on February 24.
U.S. gold futures advanced about 1%, reaching $2,928.90.
Investors and Central Banks Boost Gold Purchases
Trump’s new 25% tariffs on imports from Mexico and Canada officially took effect this Tuesday. He also raised tariffs on Chinese goods to 20%. In response, China immediately retaliated with additional tariffs of 10%-15% on certain U.S. imports starting March 10, along with new export restrictions targeting designated U.S. entities.
Traders are now looking ahead to Wednesday’s ADP employment report and Friday’s U.S. nonfarm payrolls report for insights into the Federal Reserve’s interest rate trajectory.
Any signs of an economic slowdown in the U.S. would strengthen calls for further Fed rate cuts, providing additional support for gold prices. Analysts expect gold to retest record highs in the coming weeks.
The U.S. Federal Reserve kept interest rates unchanged in its latest meeting. However, it is expected to resume rate cuts in June, with another potential reduction in short-term borrowing costs in September.
J.P. Morgan forecasts that gold could approach $3,000 per ounce in the fourth quarter of 2025.
Among other precious metals, spot silver rose 0.4% to $31.80 per ounce, platinum edged up 0.2% to $954.81, and palladium gained 0.3% to $940.80.
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