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Gold prices rise on Trump's tariffs but dollar firmness caps gains

Gold prices rose Friday, after U.S. president Donald Trump announced new tariffs against Canadian imports as well as broader threats of tariffs to other trading partners. However, gains were limited by the stronger dollar in light of mounting signs that global trade is experiencing turmoil.

As of 0245 GMT, spot gold increased 0.3% to $3333.67 an ounce. U.S. Gold Futures rose 0.6% to $3345.10.

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 all 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 including Japan and South Korea.

All new tariffs announced will go into effect on August 1, 2018.

Tim Waterer, KCM Trade's Chief Market Analyst, said that despite Trump's tariffs wars picking back up again, gold prices haven't seen the same boost as they did previously because investors are more familiar with both Trump's policies and the tariff story.

Gold is becoming more expensive to international buyers due to the U.S. Dollar Index.

Waterer stated that the move of the dollar north in tandem with gold likely limited the gains made in precious metals.

The weekly jobless claims for the U.S. dropped unexpectedly to the lowest level in seven weeks, signaling stable employment levels even though the labour market is cooling. It also signals that the Federal Reserve does not feel the need to cut interest rates again.

In a low-rate environment, gold, which is often viewed as a safe asset in times of economic uncertainty, tends do well.

On Thursday, the White House renewed its attack on Fed Chairman Jerome Powell. A senior official said Powell had "grossly managed" the central banking, citing budget deficits and overruns.

Silver spot rose 0.4% to $37.17 an ounce. Platinum fell 0.2% at $1,358.61, and palladium increased 0.2% at $1,143.55. (Reporting and editing by Sumana Aich and Rashmi Nandy, Bengaluru)

(source: Reuters)