Gold holds steady with all eyes on Trump's tariff plans

Gold prices held steady on Tuesday as market participants fretted that U.S. President Donald Trump's tariffs on Canada and Mexico will fuel inflation and hinder economic growth.

FUNDAMENTALS

* Spot gold was steady at $2,892.64 an ounce, as of 0017 GMT. U.S. gold futures were little changed at $2,902.90.


* Trump said on Monday that 25% tariffs on goods from Mexico and Canada will take effect on Tuesday, stoking fears of a trade war in North America and sending financial markets reeling.

* Trump also said reciprocal tariffs would take effect on April 2 on countries that impose duties on U.S. products, and reaffirmed that he will increase tariffs on all Chinese imports to 20% from the previous 10% levy.

* Higher inflation may force the Federal Reserve to keep rates higher for longer, which would dent non-yielding gold's appeal.

* St. Louis Federal Reserve President Alberto Musalem said on Monday he expects the U.S. economy to continue to expand this year, but recent weaker-than-expected consumption and housing data and reports from business contacts have raised concerns about possible risks to growth.

* Markets are now awaiting ADP employment report due on Wednesday and the U.S. non-farm payrolls report due on Friday for more hints on the Fed's rate trajectory.

* JP Morgan in a note said they hold a long-term structural bullish view for gold with price target of close to $3,000/oz in the fourth-quarter of 2025.

* Spot silver was unchanged at $31.67 an ounce, platinum lost 0.2% to $951.60 and palladium slipped 0.3% to $934.89.

DATA/EVENTS (GMT) 1000 EU Unemployment Rate Jan.