Gold prices rose in early Tuesday trading, reflecting growing concerns over the impact of US tariffs on global economic growth prospects. The increasing threat of a trade war is boosting demand for the safe-haven metal, with prices climbing more than 2% since President Trump confirmed that 25% tariffs on Canadian and Mexican imports would take effect overnight. At the same time, the US administration's announcement of the immediate suspension of all military aid to Ukraine has added to geopolitical instability. Heightened investor uncertainty is weighing on risk appetite, driving US stock market futures lower and further supporting demand for gold. However, the prospect of higher inflation due to the tariffs raises the likelihood of the Federal Reserve keeping interest rates elevated for longer, which could strengthen the US dollar and ultimately limit further gains in gold prices.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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