Gold prices moved off the lows as safe-haven demand inched higher amid growing fears that President Donald Trump’s tariffs on steel and aluminium imports could spark a trade war with U.S.’s key trading allies.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchange fell by $3.10, or 0.24%, to $1,320.80 a troy ounce. Gold prices clawed back some their losses after falling to a session low of $1,315.50.
China – responding to Trump’s import tariffs of 25% on steel and 10% on aluminium imports – said that while it does not want a trade war, it is capable of “handling any challenge,” and would defend the interest of the country and its people.
The European Trade Commissioner Cecilia Malmstrom, meanwhile, said the EU would “stand up to the bullies” after Trump hardened his stance on tariffs over the weekend, insisting that the countries of the EU have banded together “to screw the U.S. on trade.”
That helped renew some demand for safe-haven gold, while dollar weakness and a slip in treasury yields also supported the yellow metal amid falling expectations for a faster pace of rate hikes in the wake of slowing wage growth.
Recent data showed traders continued to up their bets on the precious metal despite investor expectations that the Federal Reserve will hike rates at its meeting next week.
CFTC COT data showed money managers increased their long bets on gold in the week ended March 9.
In other precious metal trade, silver futures fell 0.5% to $16.53 a troy ounce, while platinum futures fell 0.03% to $963.90 an ounce.
Copper fell 0.41% to $3.12, while natural gas added 1.94% to $2.79.