Gold prices fall as trade risk premium shrinks

Gold bars

Gold prices tumbled today, Feb. 4, as global trade tensions eased after the US suspended the application of tariffs on Canada and Mexico for 30 days, and despite China taking countermeasures to US protectionist policies.

April gold futures plunged by 0.59%, or $16.90, to $2,840.20 per ounce at 10:45 am Makkah time. Likewise, spot prices inched 0.14% lower to $2,809.49 an ounce, after notching a record of $2,830.49 apiece in yesterday's trading.

Similarly, March silver futures fell 0.54% to trade at $32.35 per ounce, while platinum spot prices climbed by 0.12% to $968.85 an ounce.

The trade risk premium in precious metals and commodities markets narrowed after the US suspended tariffs on Canada and Mexico for a month ahead of their entry into force today.

However, US tariffs on Chinese imports came into effect. Beijing responded by targeting some of its imports from the US with tariffs of up to 15%.

The truce between the US, Canada and Mexico caused the US dollar index, which gauges the greenback’s strength against a basket of six major currencies, to shed 0.28% to 108.69 points, which helped strengthen gold prices.