Investing.com– Gold prices rose slightly in Asian trade on Wednesday, extending small gains from the prior session as demand for safe havens remained underpinned by the prospect of increased U.S. trade tariffs.

Still, bigger gains in gold were held back by resilience in the U.S. , while easing tensions in the Middle East also sapped some demand for safe havens. 

rose 0.3% to $2,40.16 an ounce, while expiring in February rose 0.7% to $2,665.41 an ounce by 23:38 ET (04:38 GMT). 

Trump threatens more trade tariffs

U.S. President-elect Donald Trump threatened to impose additional trade tariffs on China, Canada and Mexico when he takes office, sparking increased concerns over a renewed trade war between the world’s largest economies. 

Analysts warned that any steep tariffs could undermine global economic growth and also push up U.S. inflation- which presents a higher outlook for interest rates in the long term.

The dollar rose sharply on this notion, limiting overall gains in gold. 

Safe haven demand for gold was also stymied by U.S. President Joe Biden announcing a ceasefire deal between Israel and Hezbollah, heralding a de escalation in the Middle East conflict.

Other precious metals were marginally positive on Wednesday. rose 0.4% to $30.962 an ounce, while edged higher to $932.05 an ounce. 

Among industrial metals, benchmark on the London Metal Exchange rose 0.6% to $9,026.50 a ton, while expiring in February rose 0.4% to $4.1463 a pound. 

Trump policies to limit gold appetite- BofA 

Trump’s economic policies, which are expected to invite higher U.S. growth and a stronger dollar- could limit investor appetite for gold, Bank of America analysts warned in a recent note.

Trump is expected to dole out more corporate tax cuts and economically expansionary policies in his second term, supporting growth but also pushing up inflation.

This trend is expected to keep U.S. interest rates relatively high in the long term, underpinning the dollar and Treasury yields, while limiting demand for gold. 

Precious metals, especially gold, were nursing steep losses through November after Trump’s election victory near the beginning of the month.

Industrial metal prices were pressured by the prospect of more U.S. hawkishness towards China, which is a major importer of copper and other base metals. 

Investing.com — Goldman Sachs has warned of “significant consequences” for US consumers if President-elect Donald Trump moves forward with proposed tariffs on imports from Canada, casting doubt on whether the plan will ultimately be implemented.

Reuters reported on Tuesday that Trump’s proposed 25% tariff on Canadian and Mexican imports would include , a key resource for US refineries. The oil industry has raised concerns that such a policy could harm consumers, the energy sector, and even national security.

Canada and Mexico together supply approximately 25% of the crude oil refined in the United States, which is turned into products such as gasoline and , according to data from the US Department of Energy.

Many US refineries are configured specifically to process crude from these two countries, leading industry experts to hope that oil might be excluded from any protectionist trade measures.

However, according to Reuters, citing sources familiar with the matter, oil would not be exempt from the tariffs.

Daan Struyven, head of commodities research at Goldman Sachs, noted that a 25% tariff on Canadian imports would likely drive up fuel prices in the US.

Tariffs “could in theory lead to some pretty significant consequences for three groups of people: US consumers, US refiners, and Canadian producers,” Struyven said during a roundtable discussion. Yet, he expressed skepticism about the likelihood of such tariffs, given Trump’s focus on keeping energy costs low.

The US currently imports nearly 4 million barrels of Canadian crude oil per day, a reliance that enables domestic producers to export more of their own oil.

The Canadian Association of Petroleum Producers’ CEO warned that imposing tariffs would increase energy and gasoline costs for US consumers.

The leading oil trade groups in the United States have voiced opposition to the proposed tariffs, marking an unusual divergence from Trump.

“Across-the-board trade policies that could inflate the cost of imports, reduce accessible supplies of oil feedstocks and products, or provoke retaliatory tariffs have potential to impact consumers and undercut our advantage as the world’s leading maker of liquid fuels,” said a representative for the American Fuel and Petrochemical Manufacturers (AFPM), an organization representing oil refiners.

The AFPM emphasized that it would “continue urging officials to veer clear of any policies that could disrupt America’s energy advantage.”

By Florence Tan and Siyi Liu

SINGAPORE (Reuters) – Oil producers in Canada and Mexico will likely be forced to reduce prices and divert supply to Asia if U.S. President-elect Donald Trump imposes 25% import tariffs on crude imports from the two countries, traders and analysts said.

Two sources familiar with Trump’s plan told Reuters that oil would not be exempted from potential tariff hikes on imports from Canada and Mexico even as the U.S. oil industry has warned the policy could hurt consumers, industry and national security.

The United States accounts for 61% and 56% of crude exports from Canada and Mexico, respectively, ship tracking data from Kpler showed.

Canadian crude exports have jumped 65% to about 530,000 barrels per day (bpd) so far this year, the data showed, after the opening of the expanded Trans-Mountain pipeline increased shipments to U.S. and Asia.

“The Canadian producers, if they face export constraints, if they’re not able to re-route their barrels that previously were exported to U.S. to other markets, may face deeper discounts and may also suffer some revenue losses,” Daan Struyven, co-head of global commodities research at Goldman Sachs, told reporters on Wednesday.

Canada and Mexico export mainly heavy high-sulphur crude that is processed by complex refineries in the U.S. and most of Asia.

“The impact is all on the heavy grades. What are the U.S. refiners going to do? Even Saudi Arabian Heavy crude is limited,” a Singapore-based trader said, adding that some U.S. refiners can only receive crude via pipelines, limiting their options for imports.

“Either the producer or the refiner will have to absorb the tariffs,” he said, adding that Canadian producers will have to discount their oil more to attract demand from Asian refiners and cover long-distance shipping costs.

Refining sources in Asia and analysts said they expect to see more Canadian and Mexican oil heading to Asia if Trump imposes the tariffs.

“We are likely to see quite some volume going to China and India, where refiners’ configurations are able to refine the crude,” said LSEG analyst Anh Pham.

TMX exports to Asia have risen in recent months as Asian refiners led by Chinese processors test the new grades. However, Mexican exports are down 21% to about 860,000 bpd this year.

Still, some traders and Goldman Sachs analysts remain sceptical that Trump would actually impose the tariffs, which he has previously used as a negotiating tool, as doing so would drive inflation for U.S. consumers and refiners.