Gold Silver Reports – Gold prices hovered around breakeven Thursday as safe-haven demand returned as traders feared the prospect of a global trade war after President DonaldTrump said the U.S. will impose tariffs on steel and aluminium imports as early as next week.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchangerose by $0.90, or 0.06%, to $1,318.60 a troy ounce.
Trump said the US will impose a 25% tariff on steel imports and 10% tariff on aluminium. The highly controversialmove raised fears that the U.S.’s maintrading partners including China could take countermeasures, triggering a global trade war.
The EU was said tobe drawing up a list of US products to target, including orange juice and bourbon.
“The EU stands ready to react swiftly and appropriately in case our exports areaffected by any restrictive trademeasures from the U.S.,” a European Commission source told CNBC.
While China’s commerce ministry in February said: “If the final decisionfrom the US hurts China’s interests, wewill certainly take necessary measures to protect our legitimate rights.”
Retaliation from China is seen as the biggest threat as sectors of the USeconomy including farming are highlydependent on demand from China.
While the move was expected, a sharp reaction was seen in markets: Riskier assetslike stocks were dumped for well-known safe havens like the yenand gold.
Prior to the announcement gold prices had been under pressure – trading about $10 offside – after Fed member BillDudley said four-rate hikes would fit within the Fed’s plan to raise rates gradually.
Safe-haven currencies like the yen and Swiss franc pared losses, leavingthe greenback nursingheavy losses, adding further support to the precious metal.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollarmakes gold cheaper for holders of foreign currency and thus, increasesdemand for the precious metal.
In other precious metal trade, silver futures rose 0.22% to $16.36 a troy ounce, while platinumfutures fell 2.04% to $967.50 an ounce.
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Copper fell 0.14% to $3.128, while natural gas rose 0.94% to $2.70 as the Energy Information Agencysaid natural gas storage fell more than expected. – Goldman Neal Bhai Reports
