Gold prices ticked higher on Tuesday, rebounding from a six-day low amid mounting concerns over escalating trade tensions.
By 2:30 pm AEDT (3:30 pm GMT), spot gold rose by $2.3 or 0.1%, trading at US$2,628.2 per ounce.
The renewed interest in gold followed a Truth Social post by President-elect Donald Trump, in which he vowed to impose a 25% tariff on all products from Mexico and Canada and an additional 10% tariff on goods from China upon taking office on January 20.
Trump’s announcement heightened fears of a global trade war, fuelling safe-haven flows into gold and the U.S. dollar.
Investors are now looking to the release of the U.S. Federal Reserve’s November meeting minutes for insights into the likelihood of a December interest rate cut.
The CME Group’s FedWatch Tool indicates a 55.9% probability of a rate reduction next month, which could influence gold’s trajectory.
Easing tensions in the Middle East have also weighed on gold prices. Reports suggest that Israel’s cabinet is expected to approve a ceasefire agreement with Lebanon, reducing geopolitical risk and diminishing safe-haven demand.