Gold Prices Hold Steady Amid Tariff War Fears

28 Nov 2024 , 09:56 AM

As investors processed a barrage of economic data from the previous session and assessed the likelihood of a trade war triggered by the policies of U.S. President-elect Donald Trump, gold prices remained stable on Thursday.

Spot gold remained steady at $2,636.35 an ounce. U.S. gold futures dropped to $2,635.90, down 0.1%.

The focus of Wednesday’s economic reports was the Personal Consumption Expenditures price index, which increased by 2.3% annually and 0.2% monthly, as expected.

In addition, Wednesday’s revised estimate of the U.S. gross domestic product growth for the third quarter showed a modest downward revision in consumer spending, but remained stable at 2.8%.

The U.S. central bank’s ability to lower interest rates next year may be hampered by the Federal Reserve’s difficulty returning inflation to its 2% target and the potential for greater tariffs under the incoming Trump administration.

In the meantime, Mexican President Claudia Sheinbaum threatened to retaliate if Trump imposed a 25% tariff, pointing to the possibility of job losses and increased costs for consumers in the United States.

In times of economic or geopolitical unrest, such as trade wars, gold is frequently seen as a safe-haven investment.

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