Gold (XAU/USD) trades with mild gains around $2,920 during early Asian hours on Thursday, supported by rising demand for safe-haven assets amid ongoing trade tensions and economic uncertainty.
On Wednesday, former U.S. President Donald Trump reiterated plans to impose 25% tariffs on imports from Canada and Mexico, while adding the European Union (EU) to the list of countries facing penalties. The tariffs on Canada and Mexico are set to take effect on April 2, escalating concerns of a global trade conflict.
Market participants are closely monitoring Trump’s tariff policies, which could drive further safe-haven flows into gold. However, the prospect of higher tariffs has also heightened inflation fears, potentially prompting the U.S. Federal Reserve to maintain elevated interest rates. Higher rates typically diminish the appeal of non-yielding gold, capping its upside potential.
Despite the recent pullback, analysts believe the broader bullish outlook for gold remains intact. David Meger, director of metals trading at High Ridge Futures, described the decline as routine profit-taking rather than a shift in sentiment. “We continue to see an overall upward trend,” Meger added.
Investors are expected to remain focused on geopolitical developments and Fed policy signals, which could provide further direction for gold prices in the coming sessions.
