Gold Prices Climb as Weak Dollar and Recession Fears Fuel Safe-Haven Demand
Gold prices edged higher in Asian trading on Tuesday, supported by a weakening U.S. dollar and growing recession concerns linked to President Donald Trump’s aggressive trade policies. With economic uncertainty mounting, investors turned to the precious metal as a safe-haven asset.
Market participants were closely watching the upcoming U.S. Consumer Price Index (CPI) data, set for release on Wednesday. This report is expected to provide crucial insights into the Federal Reserve’s next monetary policy moves, particularly as trade tensions create additional economic risks.
As of 02:36 ET (06:36 GMT), spot gold gained 0.4%, trading at $2,900.17 per ounce, while gold futures for April delivery rose 0.2% to $2,904.50 an ounce.
Gold Gains as Recession Fears Grow in the U.S. and Beyond
The Trump administration’s 25% tariffs on imports from Mexico and Canada, along with new trade restrictions on China, have heightened fears of an economic slowdown. Analysts caution that these policies could dampen growth and increase inflationary pressures.
Speaking on Fox News last week, President Trump declined to predict whether the U.S. could face a recession in 2025, despite rising concerns over the impact of his trade measures.
A Reuters poll highlighted that recession risks are growing across North America, with Mexico, Canada, and the U.S.all facing economic uncertainty due to the unstable rollout of trade tariffs.
Amid this turbulence, gold remains a preferred safe-haven investment, attracting demand as traders hedge against financial instability.
The U.S. Dollar Index fell 0.2%, hovering near a four-month low during Asian trading hours. A weaker dollar makes gold more attractive for international buyers, further supporting its price.
Looking ahead, investors are awaiting the Federal Reserve’s meeting on March 18-19, where policymakers will decide on interest rates. The upcoming February CPI data is expected to be a key driver in shaping market expectations regarding the Fed’s stance on monetary policy.
Other Precious Metals and Copper Market Update
While gold enjoyed gains, other precious metals experienced mixed performance.
• Platinum futures edged 0.3% lower to $961.20 per ounce.
• Silver futures rose 0.3% to $32.638 per ounce.
Meanwhile, copper prices rose, benefitting from a weaker U.S. dollar and expectations of economic stimulus in China.
As the National People’s Congress concluded its annual session, investors speculated that Beijing could introduce measures to stimulate economic growth, potentially boosting demand for industrial metals like copper.
• Benchmark copper futures on the London Metal Exchange climbed 0.3% to $9,555.00 per ton.
• April copper futures rose 0.5% to $4.6685 per pound.
With global markets reacting to economic uncertainty, gold’s resilience and copper’s industrial demand will remain focal points for investors navigating volatile conditions.
Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80.25% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer: This text constitutes marketing communication. It is not any form of investment advice or investment research or an offer for any transactions in financial instrument. Its content does not take into consideration individual circumstances of the readers, their experience or financial situation. The past performance is not a guarantee or prediction of future results.
