Gold prices retreated on Wednesday after hitting an all-time high, as a stronger U.S. dollar weighed on the metal, while escalating tariff threats from Donald Trump kept markets on edge.
Spot gold fell 0.2% to $2,928.49 per ounce as of 2:19 p.m. ET (19:19 GMT), after surging to a record $2,946.85/oz earlier in the session. U.S. gold futures settled 0.4% lower at $2,936.10.
The dollar index (.DXY) rose 0.1%, making gold more expensive for investors using other currencies.
Tariff Uncertainty Fuels Market Volatility
Market strategist Paul Wong from Sprott Asset Management noted that the heightened uncertainty surrounding tariffs and global trade tensions is supporting gold prices.
Trump announced plans to impose a 25% tariff on automobiles, along with new duties on semiconductor and pharmaceutical imports. This follows recent 10% tariffs on Chinese imports and a 25% tariff on steel and aluminum.
Gold is traditionally seen as a hedge against inflation and geopolitical risks, but its appeal weakens when interest rates rise. Federal Reserve officials remain uncertain about how tariffs will impact inflation, with traders pricing in at least one 25-basis-point rate cut by December, according to LSEG data.
Other Metals See Mixed Performance
- Silver fell 0.4% to $32.74 per ounce, nearing a 10-year high despite concerns over industrial demand.
- Platinum dropped 1.7% to $970.45, while palladium declined 1.6% to $971.47.
Analyst Han Tan of Exinity Group suggested that while tariffs may dent silver’s industrial use, its valuation could still push prices higher.
