Gold prices rose on Thursday after the United States announced it would go ahead with planned tariffs against its allies, as investors are getting ready for a possible global trade war.
US Secretary of Commerce Wilbur Ross announced that the United States is moving ahead with tariffs on steel and aluminum imported from the European Union, Mexico and Canada from midnight on Thursday. Customs duties will be 25% on steel and 10% on aluminum. Tariff decisions have been made on Mexico and Canada after talks on the North American Free Trade Agreement (NAFTA) have taken too long.
Comex gold futures for June rose 0.32% to $1,305 an ounce. Seen as a safe haven, gold often moves up in times of political turmoil. Gold also benefited from the dollar’s decline, despite the emergence of optimistic economic data.
Personal consumption inflation data rose to 0.6% in April, while jobless claims fell. The core PCE, used by Federal Reserve as a tool to help determine whether interest rates will be raised or lowered, have been reduced to keep inflation at 2% or less.
The dollar index, which measures the strength of the dollar against a range of major currencies, was trading at 94.00 points, down 0.06%.
Gold denominated in US currency is sensitive to movements in the greenback. Therefore, gold becomes more expensive for other currency holders when the dollar rises.
Silver futures rose 0.13% to $16.565 an ounce. Among other precious metals, platinum rose 0.39% to $912, while palladium futures rose 0.66%, to $981.40 an ounce. Copper futures also jumped 0.39%, to $ 3.081 per pound.