US Tariff, Trump Tariff, Trump News: Gold and silver prices fell following the U.S. imposition of new tariffs, with gold down around 1% and silver slipping 1.4%. The decline comes amid rising trade tensions and a stronger U.S. dollar.
The dollar index surged past 109 and is approaching the 110 mark, adding further pressure on precious metals by making them more expensive for holders of other currencies.
Adding to market concerns, China’s factory growth for January missed expectations ahead of the U.S. tariffs. The Caixin/S&P Global Manufacturing PMI stood at 50.1, below the 50.5 forecast from a Reuters poll, reflecting weaker manufacturing activity.
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Meanwhile, Chinese markets are closed today, limiting trading volumes and contributing to global market uncertainty.
The U.S. decision to impose 25% tariffs on imports from Mexico and Canada and a 10% tariff on Chinese goods, effective February 2. The dollar also gained strength amid weakness in the euro, driven by disappointing economic data from Europe.
In contrast, the Government of India kept import duties on gold and silver unchanged in the Union Budget, providing stability to precious metal prices.
According to Manoj Kumar Jain, gold and silver are holding key support levels at $2,722 and $30.20 per troy ounce, respectively, on a weekly closing basis in international markets. Jain anticipates heightened volatility in both metals this week due to fluctuations in the dollar index and escalating trade tensions between the U.S., China, and other nations.
Key Technical Levels by Manoj Kumar Jain:
- Gold (International): Support at $2,818–2,800, resistance at $2,852–2,870 per troy ounce
- Silver (International): Support at $32.00–31.70, resistance at $32.50–32.80 per troy ounce
- Gold (MCX): Support at ₹82,000–81,660, resistance at ₹82,650–83,000
- Silver (MCX): Support at ₹92,400–91,650, resistance at ₹94,000–94,800
Jain recommends avoiding fresh positions in gold and silver for now, advising traders to wait for China and other nations’ responses to the newly announced U.S. tariffs before making market moves.
In a bold move fulfilling months of promises, President Donald Trump has imposed sweeping new tariffs: a 25% duty on all imports from Mexico, most goods from Canada, and a 10% tariff on Chinese products entering the U.S. Notably, Canadian oil now faces an additional 10% tax, with further oil and gas tariffs expected by mid-February.
While Trump maintains that foreign nations bear the cost of these tariffs, economists argue that American companies—and ultimately U.S. consumers—pay the price through higher costs. These levies, though, could also squeeze foreign exporters, forcing them to slash prices to remain competitive in the U.S. market.
Impact on Major Trade Partners:
- Mexico remained America’s top trade partner last year, exporting $467 billion in goods to the U.S., followed by China ($401 billion) and Canada ($377 billion).
- The three nations combined accounted for 42% of the nearly $3 trillion in U.S. imports, with key sectors like motor vehicles, vehicle parts, gas, fresh produce, and consumer electronics at risk of price hikes.
- U.S. exports were heavily reliant on these countries, with $322 billion sent to Canada, $309 billion to Mexico, and $131 billion to China.
Escalating Trade War:
- Canada’s Prime Minister Justin Trudeau has vowed retaliation, announcing 25% counter-tariffs on $155 billion worth of U.S. goods.
- China criticized the move, promising to challenge the tariffs at the World Trade Organization and implement its own countermeasures.
- Mexico’s President Claudia Sheinbaum is also preparing a retaliation strategy, warning that Trump’s tariffs could trigger a recession in Mexico.
Geopolitical Overtones:
The tariffs are tied to broader issues, including efforts to curb the flow of fentanyl and illegal immigration, particularly from Mexico and Canada. Trump hinted at expanding tariffs to cover imports from the European Union and other critical sectors such as semiconductors, pharmaceuticals, steel, aluminum, copper, oil, and gas.
With no timeline for lifting the tariffs, global markets brace for potential economic fallout, including rising inflation and a slowdown in global growth.
Big events for the week of February 3, 2025:
Monday, February 3, 2025
- China: Market Closed
- Euro Area:
- 03:30 PM – Inflation Rate YoY (Flash) (January)
- US:
- 08:15 PM – S&P Global Manufacturing PMI Final (January)
- 08:30 PM – ISM Manufacturing PMI (January)
- 08:30 PM – ISM Manufacturing Employment (January)
Tuesday, February 4, 2025
- US:
- 08:30 PM – JOLTs Job Openings (December)
Wednesday, February 5, 2025
- US:
- 06:45 PM – ADP Employment Change (January)
- 07:00 PM – Exports (December)
- 07:00 PM – Imports (December)
- 08:30 PM – ISM Services PMI (January)
Thursday, February 6, 2025
- US:
- 06:00 AM – Fed Governor Jefferson Speech
- 07:00 PM – Initial Jobless Claims (February)
Friday, February 7, 2025
- US:
- 07:00 PM – Non-Farm Payrolls (January)
- 07:00 PM – Unemployment Rate (January)
- 08:30 PM – Michigan Consumer Sentiment (Preliminary
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Disclaimer:
The information provided in this article is for informational purposes only and reflects the views of industry experts. Before making any investment decisions, it is recommended that you consult a financial advisor. The team at Gold Price Today does not engage in personal buying, selling, or trading of gold or silver on exchanges. We are not responsible for any gains or losses incurred based on the information presented here
