Gold prices rose marginally on Wednesday as the U.S. dollar rose and concern grew over U.S. President Donald Trump’s sweeping reciprocal tariff plans, which are expected to fuel inflation and impact economic growth.
In the UAE, gold rates dipped AED0.5, with 24-carat gold falling to AED363.25 and 22-carat declining to AED336.5. In addition, 21-carat gold fell to AED322.5, and 18-carat gold ticked down to AED276.5.
Globally, spot gold gained 0.08 percent to $3,023.8 as of 6:06 GMT. Meanwhile, U.S. gold futures rose 0.07 percent to $3,056.52. In the last 30 days, gold has gained close to 4 percent as geopolitical and economic concerns rekindled fears among investors.
Trump’s tariffs raise recession fears
Limiting the rise in gold prices was the strengthening U.S. dollar, which gained 0.13 percent to 104.32, making bullion less attractive for other currency holders. Analysts noted that the U.S. dollar’s strength is pressuring prices and keeping them in a tight range as the market braces for the planned April 2 U.S. reciprocal tariffs.
Most recently, Trump imposed a secondary tariff on Venezuela and said that any country that buys oil or gas from Venezuela would face a 25 percent tariff when trading with the U.S.
Trump’s tariff policies are expected to be inflationary, potentially slowing economic growth and intensifying trade tensions globally. Concerns over an economic recession have also supported gold prices in recent weeks.
The latest data revealed that U.S. consumer confidence fell to its lowest in more than four years in March, with households fearing a recession and higher inflation triggered by tariffs. The data also revealed that the expectations index fell to 65.2, the lowest level in 12 years and well below the threshold of 80, which usually signals a recession ahead.
Gold prices have risen 15 percent so far this year, reaching an all-time high of $3,057.21 on March 20 amid growing geopolitical and economic instabilities.
Market prices three rate cuts this year
The consumer confidence data comes after the Fed last week revised its growth outlook downward amid the uncertainty over the impact of Trump’s trade policies. In its latest meeting, the Fed also signaled that it would deliver two 25-basis-point interest rate cuts by the end of this year. The markets, however, are pricing in the possibility that the U.S. central bank would lower borrowing costs in June, July and October.
Several Federal Reserve officials are due to speak later in the day. Markets are also awaiting the U.S. personal consumption expenditures data on Friday for further insight into the trajectory of the Fed’s monetary policy.
Elsewhere, the U.S. on Tuesday reached deals with Russia and Ukraine to halt military strikes in the Black Sea and on energy infrastructure. Washington also agreed to push to lift some sanctions against Moscow.
Read: UAE gold prices dip AED1.75, global rates below record highs amid tariff concerns
Other precious metals
Amid the marginal rise in gold prices, the precious metals market witnessed negative movement. Spot silver fell 0.64 percent to $33.53 an ounce, platinum lost 0.53 percent to $971.40, and palladium declined 0.50 percent to $951.31.
Among industrial metals, copper prices gained 0.11 percent to $5.19 on Wednesday amid growing optimism over China’s stimulus aimed at boosting consumption.
