Gold Price Rises Amid Concerns Over Trump’s Tariff Plans

Gold price (XAU/USD) continues its upward momentum during early European trading on Friday, benefiting from concerns over US President Donald Trump’s tariff proposals. The uncertainty surrounding potential trade policies has driven investors toward the safe-haven metal. Additionally, a decline in US bond yields further supports gold’s rally.

Despite these gains, expectations that the US Federal Reserve (Fed) will maintain its hawkish stance and keep interest rates elevated could limit gold’s upside. Investors are closely watching the release of US Retail Sales data for January, which is expected later on Friday, for further market direction.

Gold Gains as Trade War Fears Grow

Trump announced plans on Thursday to impose reciprocal tariffs on nations that levy duties on US imports. However, the final decision on these tariffs is still under review and will not take effect until April 1. The uncertainty surrounding trade relations has fueled gold’s appeal as a hedge against economic instability.

Meanwhile, fresh economic data from the US adds to market volatility. The Producer Price Index (PPI) rose 3.5% year-over-year in January, surpassing the 3.2% market forecast and following a 3.3% increase in December. Additionally, core PPI climbed 3.6% annually, slightly below the previous 3.7% but above the expected 3.3%.

Labor market data also showed strength, with Initial Jobless Claims falling to 213K for the week ending February 8, down from a revised 220K in the previous week and below the consensus forecast of 215K.

With ongoing concerns over trade policies and economic indicators exceeding expectations, gold remains a favored asset for investors navigating market uncertainty.

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