09:39 AM EST, 11/26/2024 (MT Newswires) -- Gold prices early on Tuesday rebounded from a 3.4% drop a day earlier after Donald Trump promised to impose punishing tariffs on imports from America's largest trading partners, Canada and Mexico.

Gold for February delivery was last seen up US$10.30 to US$2,652.90 per ounce.

The price of the precious metal plunged on Monday after a report that Israel and Lebanon agreed to a ceasefire. While the two countries appear close to a deal it has not yet been approved, with the BBC reporting Israel's cabinet is meeting today to consider an agreement for a 60-day ceasefire to end the country's fighting with the Iran-backed Hezbollah militia.

However easing international tensions were followed by a threat from U.S. President-elect Donald Trump to impose 25% tariffs on imports from Canada and Mexico, the United States' two largest trading partners, and additional tariffs on imports from China when he assumes office. The threats are likely to support safe-haven buying for the metal.

"Trump's radical plans on tariffs, tax cuts, and deportation all point to increased inflation and rising debt, two factors gold investors seek protection from," Saxo Bank noted.

Gold's move higher came despite a stronger dollar, with the ICE dollar index last seen up 0.1 points to 106.92. A strong dollar tends to suppress the price of gold.

Treasury yields also rose, with the U.S. two-year note last seen paying 4.26%, up 0.9 basis points, while the yield on the 10-year note was up 1.9 points to 4.298%.