Gold gains as investors eye Trump tariff moves

ReutersLast Updated: Feb 17, 2025, 07:26:00 AM IST

Synopsis

Gold prices slightly increased on Monday after a more than 1% drop in the previous session, amid anticipation of U.S. President Trump's reciprocal tariff plans which may escalate global trade tensions. U.S. retail sales saw a significant drop in January, leading to expectations that the Federal Reserve will not cut interest rates until the second half of the year.

Gold prices edged higher on Monday after falling more than 1% in the previous session as market participants awaited more insights on U.S. President Donald Trump's reciprocal tariff plans, which could heighten global trade tensions.

FUNDAMENTALS

* Spot gold rose 0.1% to $2,885.95 per ounce, as of 0016 GMT. Bullion has hit a record peak of $2,942.70 on February 11.

* U.S. gold futures fell 0.1% to $2,897.10.

* Trump on Friday kept alive his drumbeat of tariff threats, saying levies on automobiles would be coming as soon as April 2, the day after members of his cabinet are due to deliver reports to him outlining options for a range of import duties as he seeks to reshape global trade.

* Meanwhile, U.S. retail sales on Friday dropped by the most in nearly two years in January, suggesting a sharp slowdown in economic growth early in the first quarter.

* However, traders expect the Federal Reserve will not cut interest rates until second half of the year due to concerns over high inflation.

* U.S. Secretary of State Marco Rubio on Sunday said Ukraine and Europe would be part of any "real negotiations" to end Moscow's war, signaling that U.S. talks with Russia this week were a chance to see how serious Russian President Vladimir Putin is about peace.

* In other precious metals, spot silver fell 0.2% to $32.08 an ounce, after hitting its highest level since October 31, 2024 on Friday, latching on to factors that drove gold to successive record highs, with some analysts suggesting investors in the metal may aim to challenge a 10-year high.

* Platinum was up 0.3% at $982.55 and palladium climbed 1.3% to $974.08.

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