Gold surged to a new high in European trade on Wednesday, driven by fresh U.S. tariff threats and uncertainty over Federal Reserve policy. By 10:00 GMT, spot gold stood at $2,946.24.
Trump Targets Autos, Pharmaceuticals, and Semiconductors
On Tuesday evening, President Donald Trump announced plans to impose a 25% tariff on all automobile, pharmaceutical, and semiconductor imports. He justified the move by criticising what he described as unfair trading practices by key economic partners.
The auto tariffs could take effect as early as April, while those on pharmaceuticals and semiconductors will be delayed to allow firms time to establish U.S. operations. The move aligns with Trump’s broader agenda of using tariffs as leverage to bolster American industry.
No reaction to Tariff Threats from markets
Unlike previous trade war shocks, markets showed a muted reaction to Trump’s announcement. Investors appear increasingly accustomed to trade tensions, with risk-driven assets absorbing the news without a major sell-off.
Fed Minutes and Economic Data in Focus
Beyond trade developments, investors are awaiting signals from the Federal Reserve, which will release minutes from its January meeting later today. The central bank left interest rates unchanged and signalled a cautious approach to rate cuts amid persistent inflation concerns.
Several Fed officials are due to speak this week, reinforcing expectations that rate reductions are not imminent. Meanwhile, key purchasing managers’ index (PMI) readings from the U.S. and other major economies will offer further insights into global economic momentum in the days ahead.
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