Gold touch softer after Trump administration US car tariffs
LONDON (March 6) Gold’s price (XAU/USD) is softening a touch to around $2,900 on Thursday, though a new all-time high above $2,956 could still be in the cards. Although there might be some easing for Canada and Mexico with a delay on car import tariffs into the United States (US), the reciprocal tariffs are still due to kick in as of April. This still supports safe haven inflow which is beneficial for the precious metal.
Meanwhile, the focus shifts this Thursday to Europe, where the European Central Bank (ECB) will deliver its interest rate decision, with market expectations for a 25 basis points (bps) rate cut. A high-stakes European meeting is set to take place as well, where EU leaders will decide on the defense spending package and the possibility of providing more aid to Ukraine.
Another seismic shift can be seen this week in bonds, where traders are now pricing in multiple interest rate cuts by the Federal Reserve (Fed) for 2025. The reason is the deteriorating US economic data, which looks to confirm the idea that exceptionalism has come to an end and sparks recession fears.
Daily digest market movers: Copper in the mix
- The delay of automaker US tariffs on Mexico and Canada has led to a shift in Treasury yields, with investors expecting the Fed to cut interest rates multiple times this year, which could benefit Gold, Bloomberg reports.
- Another precious metal, Copper, jumped by more than 5% in Wednesday’s New York session. Prices are leaping further above other global benchmarks, as US President Donald Trump suggested imports of this commodity could be subject to a 25% tariff, Reuters reports.
- Mali has stopped issuing permits for small-scale Gold mining to foreign nationals after several deadly incidents. Interim President Assimi Goita has “instructed the government to strengthen measures to avoid human and environmental tragedies,” Minister of Security and Civil Protection General Daoud Aly Mohamedinne said on Wednesday, Bloomberg reports.
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