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Gold Rises on Trade War Jitters; Focus Now on US PPI Data

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
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Gold Rises on Trade War Jitters; Focus Now on US PPI Data

Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo
Gold bars from the vault of a bank are seen in this illustration picture taken in Zurich November 20, 2014. REUTERS/Arnd Wiegmann/File Photo

Gold rose on Thursday, supported by a weaker US dollar and growing worries over US President Donald Trump's tariff plans, which could heighten global trade tensions, while investors eyed another set of inflation data.

Spot gold added 0.5% to $2,917 per ounce as of 1158 GMT, moving back towards its record peak of $2,942.70 hit on Tuesday. US gold futures firmed 0.6% to $2,944.80.

On Wednesday, gold prices fell more than 1% after stronger-than-expected US consumer price index for January, but rebounded later as ongoing trade war uncertainties kept the safe-haven metal's demand intact, Reuters reported.

Trump announced plans to impose reciprocal tariffs on countries that levy duties on US imports, expected Wednesday or Thursday.

"Trump is unpredictable and, as long as uncertainty remains in the market, gold will continue to receive support," said Ajay Kedia, director at Kedia Commodities, Mumbai.

"Overall, the dollar index is currently under pressure, which has been supportive for gold."

The dollar index fell 0.2%, making greenback-priced gold less expensive for foreign buyers.

Investors are now focussed on the US Producer Price Index (PPI) data due at 1330 GMT, followed by Friday's retail sales report, for further economic clues.

Meanwhile, Federal Reserve Chair Jerome Powell, at his second congressional hearing this week, reiterated that the central bank was in no rush to cut interest rates.

"Market is convinced that there is very limited room for the Fed to ease; Fed funds futures trimmed rate cut expectation to 29bps for this year, with the chance of a 25bp cut priced at 78% by September and at 94% by October," OCBC analysts said.

Bullion is seen as a hedge against inflation and economic uncertainties, but higher interest rates tarnish the non-yielding asset's allure.

ANZ expects gold to touch a record high of $3,000 per ounce in 2025.

Spot silver was steady at $32.24 per ounce. Platinum added 0.9% to $1,000.94 and palladium firmed 0.9% to $981.95.

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Auto Industry Rocked by Trump's 25% Tariffs on US Imports

New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
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Auto Industry Rocked by Trump's 25% Tariffs on US Imports

New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)
New Toyota vehicles are stored at the Toyota Logistics Service Inc., an imports processing facility at the Port of Long Beach in Long Beach, Calif., Wednesday, March 26, 2025. (AP Photo/Damian Dovarganes)

US automakers and their global rivals were rocked on Wednesday by President Donald Trump's announcement that he would impose 25% tariffs on all vehicles and foreign-made auto parts imported into the United States.
The new levies, if kept for an extended period, could add thousands of dollars to the cost of an average US vehicle purchase and impede car production across North America.
That will be because of the intertwined manufacturing operations developed by car makers across Canada, Mexico and the United States over the last three decades.
Nearly half of all cars sold in the US last year were imported, research firm GlobalData says, according to Reuters.
In response to the news, shares of General Motors slumped 8% in after-market trading. Shares in Ford and US-traded shares of Chrysler-parent Stellantis fell about 4.5% each.
In Asia, shares in Toyota Motor, Honda Motor and Hyundai Motor all fell between 3% and 4%.
Shares in Tesla, which makes all the cars sold in the United States locally but with some imported parts, were down 1.3%.
Trump said the duties announced on Wednesday could be a net neutral or even good for Tesla, adding that its CEO, and his close ally, Elon Musk, did not advise him regarding auto tariffs.
In a post on X following the news, Musk said the tariffs would also affect Tesla.
"This will affect the price of parts in Tesla cars that come from other countries," he wrote in another post on X. "The cost impact is not trivial."
The companies did not immediately return emails seeking comment.
Trump's tariffs and threats to impose them have sowed uncertainty in businesses and roiled global markets since he returned to the White House in January.
On Wednesday, Trump reiterated that he expected the auto tariffs to prompt automakers to boost investment in the United States, instead of Canada or Mexico.
Autos Drive America, a group representing major foreign automakers such as Honda, Hyundai, Toyota and Volkswagen , said the "tariffs imposed today will make it more expensive to produce and sell cars in the United States, ultimately leading to higher prices, fewer options for consumers, and fewer manufacturing jobs in the US."
Automakers in North America have largely enjoyed free trade status since 1994. Trump's 2020 US-Mexico-Canada Agreement (USMCA) imposed new rules designed to spur regional content production.
After clamping tariffs of 25% on Mexico and Canada in early March, Trump allowed a one-month reprieve for vehicles produced in compliance with the terms of his USMCA, which benefited American companies.
The new rules do not extend that reprieve.
"Companies that have invested hundreds of millions and billions of dollars on plants in Canada and Mexico will likely see their profits cut dramatically over the next few quarters, if not into a couple years," said Sam Fiorani, analyst at AutoForecast Solutions.
"We're going to look at adjusting our sales and production forecasts because this will throw everything into chaos."
The White House said that 25% tariffs on automotive parts imported to the US would take effect no later than May 3, taxing key items such as engines, transmissions, powertrain parts, and electrical components.
Importers of automobiles under the USMCA will get the chance to certify their US content so that only non-US content is taxed, the White House said.
Before the unveiling of the new tariffs, Cox Automotive, an automotive services provider, predicted they would add $3,000 to the cost of a US-made vehicle and $6,000 on vehicles made in Canada or Mexico, without exemptions.
If tariffs go through, by mid-April Cox expects disruption to "virtually all" North American vehicle output, leading to 20,000 fewer vehicles a day, or a hit of about 30% to production.
The United Auto Workers union, which represents factory workers at Big Three Detroit automakers, praised Trump's action.
"With these tariffs, thousands of good-paying blue collar auto jobs could be brought back to working-class communities across the United States within a matter of months, simply by adding additional shifts or lines in a number of underutilized auto plants," UAW President Shawn Fain said in a statement.