Investing.com — Gold prices rose Tuesday as the threat of higher trade tariffs from President-elect Donald Trump boosted safe-haven demand, though a spike in the dollar limited any big gains in metals markets.
The yellow metal suffered steep losses from the previous session after multiple reports suggested a ceasefire between Israel and Lebanon was near, reducing demand for safe havens.
rose 0.2% to $2,629.72 per ounce, while the December expiration rose 0.4% to $2,654.14 per ounce at 09:00 ET (02:00 GMT).
Trump’s threat buoys maintain demand
Trump threatened to impose a 10% tariff on China and a 25% tariff on Canada and Mexico, claiming the measures would stem the alleged flow of illegal immigrants and illegal drugs through U.S. border countries.
His threats heightened investor concerns about a renewed global trade war, especially with China. Trump had campaigned on promises of strict trade measures against Beijing.
China denounced the threat, with the possibility of retaliation from Beijing also dampening risk appetite.
Still, bigger gains in gold were held back as the dollar soared after Trump’s announcement. The greenback returned within sight of a two-year high last week.
Other precious metals were also mixed, falling 0.9% to $936 an ounce while rising 1.1% to $31,005.
Among industrial metals, copper prices fell on the prospect of more economic headwinds for top importer China. The benchmark on the London Metal Exchange fell 0.1% to $9,041.50 per tonne, while the benchmark expiring in March fell 0.03% to $4.11575 per pound.
Gold skittish as tensions ease in M.East
The safe haven for gold was limited by bets on easing tensions between Israel and the Lebanese militant group Hezbollah, with multiple reports suggesting a ceasefire was imminent.
Increased tensions in the Middle East were a major driver of gold gains earlier this year, especially after Israel and Iran attacked each other.
Gold posted some gains from last week as increased tensions between Russia and Ukraine boosted demand for ports. Moscow threatened nuclear retaliation for Kiev’s use of Western-made long-range missiles.
(Ambar Warrick contributed to this article)
