Gold prices rise as investors remain worried over potential Trump tariffs

Gold prices rose on Thursday as investors worried about potential import tariffs from US President Donald Trump, while investors awaited a key inflation report to gauge the Federal Reserve's policy path.

Spot gold was up 0.7 per cent at $2,777.55 per ounce, as of 1227 GMT. US gold futures climbed 0.9 per cent to $2,794. 

 

"Despite the fact that tariffs on gold in the States are extremely unlikely given that it is a reserve asset, risk managers are taking no chances and moving metal into the States," said StoneX analyst Rhona O'Connell.

"The element that is most affected by this is the exchange of futures for physical (EFP), but it is undoubtedly contributing to support in spot."

London bullion market players are racing to borrow gold from central banks, which store bullion in London, following a surge in gold deliveries to the US, two sources familiar with the matter said.

Even though Trump did not mention gold in his tariff plans, traders were worried about possible risks, leading to more gold being sent to New York.

Earlier this week, the White House said Trump plans to hit Mexico and Canada with steep tariffs on Saturday while also considering some on China.

Meanwhile, the Fed held interest rates steady on Wednesday. Chair Jerome Powell said there would be no rush to cut them again.

Investors now await the December US personal consumption expenditures (PCE) price index report on Friday.

Spot silver was up 0.7 per cent at $31.02 per ounce.

Silver, meanwhile, is seeing renewed strength relative to gold after the gold-silver ratio once again got rejected above 91, said Ole Hansen, head of commodity strategy at Saxo Bank.

"Market is pricing in a higher risk of silver import tariffs compared to gold."

Platinum added 1.4 per cent to $959.73, and palladium gained 2 per cent to $981.51.