Gold prices retreated from record levels on Tuesday afternoon as investors seized the opportunity to take profits, while safe-haven demand continued to strongly support the precious metal.
Gold futures for April delivery were last traded at $2,920.00 per ounce, marking a drop of $43.20 compared to Monday’s record closing price.
The price decline followed a statement from U.S. President Donald Trump on Monday, confirming his plan to impose a 10% tariff on energy imports from Canada and a 25% duty on goods from Canada and Mexico, the two largest U.S. trading partners. These import taxes, combined with an already existing 10% tariff on Chinese products, could negatively impact global economic growth and reduce demand.
"Safe-haven demand remains strong amid trade policy uncertainty. Trump’s confirmation of new tariffs on imports from Canada and Mexico keeps inflation and trade war risks in focus," Saxo Bank noted.
The U.S. dollar weakened, which is typically positive for commodities denominated in the currency. The ICE dollar index last fell by 0.33 points to 106.27.
U.S. Treasury yields declined, lowering the cost of holding gold. The yield on the two-year U.S. note was last seen down by 4.3 basis points at 4.117%, while the yield on the 10-year note fell by 9.6 basis points to 4.315%.