Gold prices cut losses as Trump temporarily pauses tariffs on Mexico, Canada
Investing.com-- Gold prices cut losses to trade near record highs on Monday, as the dollar retreated on cooling trade war worries after President Donald Trump temporarily paused tariffs on Mexico and Canada after striking a border security deal with both nations.
Spot gold rose 0.5% to $2,814.69 an ounce, while gold futures expiring in April rose 0.6% to $2,850.60 an ounce by 5:08 p.m. ET (22:08 GMT).
Gold recovers ground after dollar gives up gains on easing trade war fears
Trump paused tariffs on Canada and Mexico for 30 days, providing markets with respite at time when many were fearing that a global trade war was brewing. Market attention now turns to China, with Trump expected to discuss trade issues with Chinese premier Xi Jinping over the next 24 hours.
Trump annoucned 25% tariffs on Canadian and Mexican imports, along with a 10% duty on China on Saturday. All three countries balked at the tariffs and vowed retaliation.
Trump had largely telegraphed the tariffs last week, before signing an executive order imposing them on Saturday. The tariffs will take effect from Tuesday.
The dollar rose sharply on the tariff news, pressuring metal markets.
Analysts were seen warning that the trade tariffs were likely to factor into higher U.S. inflation, giving the Federal Reserve less impetus to cut interest rates further. This could diminish gold’s long-term prospects, despite strong near-term safe haven demand.
Other precious metals were mixed. Platinum futures fell 3.9% to $1,002.95 an ounce, while silver futures rose 0.9% to $32.545 an ounce. Both metals, like gold, had also risen sharply last week.
Among industrial metals, benchmark copper futures on the London Metal Exchange rose 0.9% to $9,132.00 a ton, while March copper futures gained 1.2% to $4.3305 a pound.
Copper was also pressured by softer-than-expected private purchasing managers index data from top importer China, as business activity remained soft in the first month of 2025.
JPMorgan reiterates bull case for gold
JPMorgan analysts said in a Monday note that they maintained their bullish view on gold in the medium-term, stating that risk aversion in broader markets could still drive investors into the yellow metal.
The investment bank still expects gold to rise to $3,000 an ounce by late-2025, stating that lower U.S. interest rates and a stabler, albeit slower economy, will drive flows into the yellow metal.
JPM is set to deliver about $4 billion worth of gold against futures contracts in February. The investment bank is by far the largest dealer of gold in the world.
(Ambar Warrick contributed to this story)