Gold prices edged up on Tuesday (March 25) amid ongoing uncertainty over the new tariffs set to be implemented by the Trump administration next week. Concerns over a potential slowdown in the US economy and rising inflation continue to drive demand for safe-haven assets.
According to Reuters, spot gold rose 0.1% to $3,015.66 per troy ounce at 06:44 GMT, while US gold futures also gained 0.1% to $3,019.70.
"Uncertainty remains over the extent and scope of upcoming US retaliatory tariffs ... gold continues to gain support as a hedge against potential shocks," said Yeap Jun Rong, a market analyst at IG.
On Monday, President Donald Trump stated that auto tariffs would soon be implemented but hinted that not all threatened tariffs would take effect on April 2. Wall Street interpreted this as a sign of flexibility after weeks of uncertainty that rattled markets.
Trump’s tariff policies are expected to slow economic growth, heighten trade tensions, and fuel inflation.
Raphael Bostic, President of the Atlanta Federal Reserve Bank, mentioned that he expects inflation to remain subdued for longer than anticipated. As a result, he now foresees the Fed cutting its benchmark interest rate by just a quarter percentage point by the end of 2025.
Gold, widely seen as a hedge against economic and geopolitical uncertainty, typically strengthens in a low-interest-rate environment.
Markets are now awaiting the release of the Personal Consumption Expenditures (PCE) Index, the Fed’s preferred inflation gauge, on Friday to gauge the central bank's next policy move.
Meanwhile, investment funds allocating capital to gold mining companies are expected to see their largest inflows in over a year this March, driven by record gold prices that enhance profit outlooks and corporate cash flows.
Elsewhere, spot silver rose 0.3% to $33.10 per troy ounce, platinum gained 0.2% to $974.65, and palladium added 0.2% to $953.53.
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