Gold Price News: Gold Rebounds as US Doubles Tariffs on Canadian Metals

Gold prices rose on Tuesday, recapturing the previous day’s losses, as the markets reacted to uncertainty created by the latest hike in US tariffs on Canada.

Prices climbed as high as $2,922 an ounce on Tuesday, up from around $2,885 an ounce in late trades on Monday.

Trade War Deepens

Tuesday’s rebound for gold came as the US dollar fell to a four-month low against the Euro while interest in safe haven assets increased amid an escalating US-led global trade war.

US President Donald Trump on Tuesday said he would double the tariffs on imports of Canadian steel and aluminium to 50%, in response to Canada saying it would impose a 25% surcharge on electricity exported to the US. New Canadian Prime Minister Mark Carney on Monday said Canada would fight back against the US tariffs until America ‘shows respect’.

Gold reacted positively to the latest round of trade jitters, while stock market indices, including the S&P 500 index, fell sharply, adding to a three-week slump.

The deepening trade war is bullish for gold, which typically benefits when traders sell out of other assets.

In the latest twist, Canada’s province of Ontario late on Tuesday backed down from its threatened electricity tariffs, prompting President Trump to hint that he might hold off from doubling tariffs on Canadian goods.

Upcoming data

Looking ahead, the markets will be watching out for Wednesday’s US inflation figures for February, particularly in the context of the US Fed having to balance the need to keep inflation under control while keeping an eye on the impacts of America’s deepening trade tensions. More economic figures are expected on Thursday, with the US Producer Price Inflation numbers for February as well as the weekly initial jobless claims figures for an update on the health of the US labour market.