Gold prices fall from record high as Trump tariff concerns ease
nvesting.com - Gold prices fell in Asian trade on Monday, retreating further from a record high as reports suggested US President Donald Trump's April 2 tariffs may be milder than initially feared, dampening safe-haven demand.
A weaker dollar helped to cushion gold's losses, while other metals in the market posted gains. Copper prices rose on expectations of tighter global supplies, particularly amid US tariffs and Chinese smelter closures.
Despite the decline, gold remained near its previous peak, as safe-haven demand continued to be bolstered by uncertainty over the US economy and the Trump administration's upcoming tariff plans.
Gold prices turn lower
Spot gold fell 0.2% to $3,018.51 an ounce, while May gold futures were steady at $3,049.30 an ounce. Spot gold hit a record high of $3,057.50 an ounce last week.
Trump's tariffs expected to be milder, boosting risk appetite
The decline in gold prices coincided with a jump in Wall Street futures, as markets grew optimistic that the impact of Trump's tariffs would not be as severe as expected.
According to sources from Bloomberg and the Wall Street Journal on Sunday, Trump will not impose tariffs on autos, pharmaceuticals, semiconductors and consumer goods on April 2 as he had previously threatened.
Furthermore, Trump’s tariffs are expected to apply only to 15 countries with large trade deficits with the US, easing concerns about their broader impact on the global economy.
However, the White House has yet to confirm the news, creating uncertainty in the market. Tariffs on major US imports could still increase domestic inflation and weigh on the economy.
This uncertainty keeps demand for safe-haven gold relatively high, with about a week to go before Trump’s tariffs are due.
In addition, market attention is also focused on peace talks between Russia and Ukraine, along with rising tensions in the Middle East.
Upcoming US Economic Data
A number of key US economic indicators are due this week, including the purchasing managers' index (PMI), PCE price index and revised fourth-quarter GDP data.
Copper prices rise on supply concerns
LME copper prices rose 0.6% to $9,927.90 a tonne, while May copper futures rose 0.3% to $5.1305 a pound.
The red metal has been on a strong run in March on expectations of stimulus measures from China, the world's largest copper importer. These measures could boost demand for the red metal.
Furthermore, concerns about supply disruptions have also supported copper prices. Trump has threatened to impose a 25% tariff on all copper imports, which could tighten physical copper supplies in the US.
Additionally, some smelters in China are planning to cut production, which could reduce global refined copper supplies.