Gold prices saw a modest increase on Monday, March 10, supported by a weaker US dollar and inflows into safe-haven assets due to concerns over a potential global trade war. Investors are also closely monitoring signals regarding the Federal Reserve’s stance on interest rates.
Gold Market Moves
Spot Gold: Up by 0.1% to $2,914.42 per ounce at 0052 GMT.
US Gold Futures: Increased by 0.3% to $2,921.90.
The rise in gold prices comes amid growing fears about the impact of US tariff policies on global trade. Safe-haven demand has pushed investors towards gold, which is traditionally seen as a store of value during times of economic or political uncertainty.
US Tariff Concerns and Economic Impact
The market’s attention is focused on the tariff actions taken by US President Donald Trump, especially his recent moves on Mexico, Canada, and China over concerns related to fentanyl. Trump has been cautious about predicting whether these tariff policies could lead to a recession, despite stock market volatility.
Tariffs Imposed: Trump introduced a 25% tariff on imports from Mexico and Canada last Tuesday, along with new duties on Chinese goods.
Policy Uncertainty: The unpredictability of Trump’s tariff decisions, including temporary exemptions on some imports, has caused confusion in the market, further exacerbating concerns over inflation and potential economic slowdown.
These tariff measures have raised alarms for many investors, who fear that they could negatively impact economic growth and contribute to inflation. This uncertainty fueled a surge in gold prices, which reached a record high of $2,956.15 on February 24, 2025.
Gold’s Role as a Hedge Against Inflation and Political Risk
Gold is often viewed as a hedge against both political instability and rising inflation. As concerns over inflation mount, particularly with the uncertainty surrounding US tariffs, gold has attracted more investors.
However, if inflation continues to rise, the Federal Reserve might decide to keep interest rates high. This would reduce gold’s appeal since it does not yield income like other assets, such as bonds or dividends.
Economic Data and Market Expectations
The latest data from the US Labor Department revealed that nonfarm payrolls increased by 151,000 in February, slightly up from a downwardly revised figure of 125,000 in January. Investors are now looking ahead to upcoming economic reports for further insights into the economy and the Fed’s policy direction.
Consumer Price Index (CPI): The US CPI data will be released on Wednesday.
Producer Price Index (PPI): The PPI data is expected on Thursday.
These reports will help investors assess whether inflationary pressures are building and how the Fed might respond.
Other Precious Metals
Silver: Firmed by 0.1% to $32.56 per ounce.
Platinum: Held steady at $962.90.
Palladium: Fell by 0.2% to $946.30.
With gold continuing to edge higher, the broader precious metals market is also showing slight movements, as investors remain cautious and await further economic indicators.
Conclusion
Gold prices are seeing modest gains amid a weaker US dollar and growing concerns about global trade tensions, particularly in relation to US tariff policies. While gold remains an attractive hedge against economic and political uncertainty, its future appeal may depend on the Federal Reserve’s response to rising inflation. The upcoming economic data will be critical in shaping market expectations in the coming days.
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