A Relative Calm in Gold Movements Amid Ongoing Uncertainty Over U.S. Tariffs

- Gold prices dipped slightly during Asian trading on Tuesday but remained close to recent highs, as demand for safe-haven assets continued to be supported by uncertainty surrounding U.S. trade tariff plans.
- Gold lost some of its gains in recent sessions after the exemption of electronics imports from steep U.S. tariffs on China helped boost risk appetite. President Donald Trump also indicated on Monday the possibility of further exemptions.
- However, Trump's 145% tariffs on China, along with Beijing’s 125% tariffs, remain in effect, reflecting an intense trade war between the world’s two largest economies. This scenario has kept gold supported by haven demand. A weaker dollar, amid a sharp selloff in U.S. Treasuries, has also supported gold and the broader metals market.
- Spot gold fell by 0.4% to $3,224.60 per ounce, while gold futures for June delivery held steady at $3,240.85 per ounce.
- Spot gold remained close to the record high of $3,245.69 per ounce reached in April.
- Persistent demand for gold continued to support it as a traditional haven, especially given the growing uncertainty over the global economy amid the ongoing U.S.-China trade war.
- Trump’s sector-specific tariffs, along with a lack of clarity in his approach regarding additional levies or exemptions, have added to the uncertainty surrounding the economic outlook.
- This uncertainty regarding the impact of U.S. trade tariffs has led investors to begin pricing in a higher likelihood of a U.S. recession this year, although the odds of a slowdown eased after Trump announced a 90-day exemption from most retaliatory tariffs.
- The U.S. President is expected to announce tariffs on electronics and pharmaceutical products soon, which could lead to further market volatility.
- The U.S. continues to face an intense trade war with China, with neither side showing signs of de-escalation or compromise.
- Conversely, platinum futures steadied at $956.60 per ounce, while silver futures rose 0.2% to $32.225 per ounce.
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