Investing.com – Gold prices rose sharply supported by a slump in the dollar as fears of a potential global trade war mounted, adding to safe-haven demand, following President Donald Trump’s proposal to impose tariffs on steel and aluminium imports.
Gold futures for April delivery on the Comex division of the New York Mercantile Exchange rose by $18.70, or 1.43%, to $1,323.80 a troy ounce.
Trump said Thursday the US will impose a 25% tariff on steel imports and 10% tariff on aluminium. The U.S.’s main trading hit back as the EU was said to be considering setting duties on about $3.5 billion of U.S. imports on iconic U.S. brands including Harley Davidson, Bourbon, Blue Jeans.
That helped extend the flight-to-safety trade seen Thursday, as well-known safe havens like the yen and gold remained well supported.
Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand for the precious metal.
Despite the sharp upswing, gold prices were set to post their second-straight weekly loss as the yellow metal struggled to claw back losses sustained earlier this week which followed Federal Reserve chair Jerome Powell’s hawkish comments.
In other precious metal trade, silver futures rose 1.50% to $16.52 a troy ounce, while platinum futures rose 0.97% to $967.10 an ounce.
Copper rose 1.59% to $3.13, while natural gas fell 0.07% to $2.70.