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Gold prices rise on demand for safe-havens as Trump escalates his trade war

Gold prices rose on Friday for a third consecutive session, after U.S. president Donald Trump announced new tariffs against Canada and threatened broader tariffs against other trading partners.

As of 0755 GMT, spot gold rose 0.5% to $3339.99 an ounce. U.S. Gold Futures rose 0.8% to $3351.

We're seeing a growing demand for gold, as a safe haven. Investors are looking for a safe asset, despite the stock market's highs. Any dip in gold will be seen as an opportunity to buy now," said Carlo Alberto De Casa.

Trump announced on Thursday that the U.S. will impose a tariff of 35% on imports coming from Canada, and plans to impose blanket duty rates of 15% or 20 % on other trading partners.

The announcement follows a 50% tariff announced on Wednesday on U.S. imports of copper and a similar tax on Brazilian goods, as well as tariff notifications sent to other trading partners earlier.

Trump said that the European Union would receive a letter about tariff rates on Friday. This puts into question the progress in trade negotiations between Washington and the 27 nation bloc.

The prospect of a slowdown in the economy has boosted demand for safe-haven assets like gold. Analysts at ANZ noted that the Fed's more dovish stance is also boosting investors' appetite.

The data on Thursday revealed

Weekly jobless claims dropped unexpectedly in the U.S. to a low of seven weeks, which indicates stable employment levels.

Christopher Waller, the Federal Reserve governor, reiterated on Thursday his belief that the central bank can cut interest rates during its policy meeting in late August.

The President of the Fed Bank of San Francisco is also a Fed Bank official

Mary Daly

Two rate cuts are still on the table this year.

Gold that doesn't yield is more appealing because of lower rates.

Silver spot rose 0.9%, to $37.37 an ounce. Platinum fell 1%, to $1.346.81, and palladium increased 1.3%, to $1.156.44. (Reporting and editing by Joe Bavier in Bengaluru, Brijesh Patel from Bengaluru)

(source: Reuters)