Gold edged lower on Wednesday as a firmer US dollar and Treasury yields pressured the yellow metal, while markets continued to track the possible impact of fresh US tariffs.
Spot gold fell 0.3% to $2,909.86 an ounce as of 0327 GMT after rising nearly 1% on Tuesday, while US gold futures were steady at $2,920.70.
Benchmark 10-year US Treasury yield rebounded from an over four-month low hit in the previous session, decreasing non-yielding gold’s appeal, while the dollar index also firmed.
“The move lower has been very modest so far in APAC trade and probably says more about the markets digesting the prior day’s sharper rally than any new catalyst that has only just emerged to pressure gold,” said Ilya Spivak, head of global macro at Tastylive.
Higher Treasury yields and a slight recovery from the US dollar may be pressure prices, Spivak said.
US President Donald Trump’s new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with a doubling of duties on Chinese goods to 20%, sparking trade wars that could slam economic growth and lift prices for Americans still smarting from years of high inflation.
In response, China and Canada retaliated with their own set of tariffs on a range of US goods, with Mexico expected to respond on Sunday.
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Trump’s policies, widely seen as likely to stoke economic uncertainty, have helped safe-haven bullion rise over 10% so far this year.
Federal Reserve Bank of New York President John Williams said on Tuesday that the US tariffs will likely drive inflation higher, but believes the current interest rate policy is appropriate and does not need changes.
Higher inflation could force the Fed to hold rates for longer, tarnishing non-yielding gold’s appeal.
Markets now await the ADP employment report due later in the day and US nonfarm payrolls on Friday.
Spot silver was little changed at $31.93 an ounce, and platinum slipped 0.2% to $958.41.
Palladium added 0.4% to $945.97.
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