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Gold prices rise on demand for safe-haven assets amid Trump tariff fears

Gold prices rose Tuesday on the back of safe-haven demand amid uncertainty surrounding President Donald Trump's tariff plans that will be announced next week, which could potentially increase inflation.

At 09:31 am, spot gold rose 0.4% to $3.024.56 per ounce. ET (1331 GMT). U.S. Gold futures rose 0.5% to $3.029.30.

Jeffrey Christian, managing director of CPM Group, said that investors are worried about the current state of the global economy, particularly with U.S. policy. They are buying gold to act as an alternative investment because they fear the U.S. could plunge the world into recession.

Gold, which is traditionally viewed as a hedge to geopolitical or economic uncertainty, has increased by more than 15 percent this year, reaching a record high of $3,057.21 in March.

Trump said that not all his levies threatened would be imposed by April 2, and some countries could get a break. The Financial Times reported that the president was considering a two step tariff regime for next week.

Trump's tariff policy is expected to have a negative impact on the economy, cause further trade tensions and increase inflation.

Atlanta Federal Reserve President Raphael Bostic said he expected just one quarter-percentage-point reduction in the Fed's benchmark interest rate by the year-end, following the U.S. Federal Reserve's decision last week to keep rates on hold while hinting at half-percentage-point cut later this year.

"The odds of rates cuts seem to have backed off a bit, and I think it's overall still very bullish for an (inflationary) metal like gold. "I would say the next level is probably around $3.125," said Daniel Pavilonis. Senior market strategist at RJO Futures.

The U.S. and Ukrainian delegations will meet in Saudi Arabia on Tuesday following the Russia-U.S. meeting there on Monday on a limited Black Sea truce proposal. Washington hopes that this will pave the way for wider peace negotiations.

Spot silver rose 1.9%, to $33.61 per ounce. Platinum increased by 1.1%, to $983.56. Palladium gained 1.2%, to $959.75. (Reporting from Bengaluru by Anmol Choubey. Mark Potter (Editing)

(source: Reuters)