Gold prices inched up on Wednesday to their highest in a week as the dollar weakened and equities dropped after U.S. President Donald Trump said he would push ahead with punitive tariffs on imports, rekindling fears of a potential trade war.
Spot gold rose 0.1 percent to
$1,335.02 per ounce by 0314 GMT, having hit $1,340.42 an ounce earlier
in the session, its highest since Feb. 26.
U.S. gold futures for April delivery rose 0.1 percent to $1,336.30 per ounce.
in risk assets, and concerns around the implications of Trump's tariff
rhetoric has helped propel gold higher," said Jordan Eliseo, chief
economist at gold trader ABC Bullion.
Global stocks and the dollar
fell after a key advocate for free trade and Trump's top economic
adviser, Gary Cohn, resigned after the president said he was sticking
with plans to impose tariffs on imports, which some critics have dubbed
the first shot in a global trade war.
Last Thursday, Trump had
said a plan for tariffs of 25 percent on steel imports and 10 percent on
aluminium products would be formally announced this week.
fear the departure of Cohn, a former Wall Street banker, would embolden
protectionist forces in the U.S. administration as Trump tries to
impose hefty tariffs.
"Prices will remain firmly supported ...
from Cohn's departure as the tariff gambit hits the market again with
blunt force," said Stephen Innes, APAC trading head at OANDA.
resignation also offsets pressure from recovering risk appetites that
followed Tuesday's news of North and South Korea holding their first
summit in over a decade, and that came after the South said the North
expressed willingness to discuss denuclearization with the United
Gold is used as an alternative investment during times of
political and financial uncertainty, and a weaker dollar makes the metal
cheaper for holders of other currencies.
Spot gold may fall to
$1,327 per ounce following its failure to break above $1,342, according
to Reuters technical analyst Wang Tao.
gold-backed exchange-traded funds (ETFs) added more tonnes in February
than North America or Europe, reversing Asia's 2017 trend of having more
flows out, the World Gold Council said on Tuesday.
In other precious metals, silver fell 0.1 percent to $16.71 per ounce, after hitting its highest in more than two weeks.
Platinum dipped 0.2 percent to $966.50 per ounce.
Palladium declined 0.4 percent to $982.00 per ounce.