Rifan Financindo – Gold hits record high as Trump tariffs spur safe-haven buying
Gold prices hit an all-time high on Monday, bolstered by safe-haven inflows after U.S. President Donald Trump’s tariffs on Canada, China and Mexico added to concerns of inflation that would dent economic growth.
Spot gold rose 0.8% to $2,818.99 per ounce by 01:45 p.m. ET (1845 GMT), after hitting a record of $2,830.49 earlier in the session.
U.S. gold futures settled 0.8% higher at $2,857.10.
Despite the usual dampening effect of a strong dollar on the gold market, prices have been rallying due to the safe-haven demand driven by uncertainty surrounding Trump’s tariffs, said David Meger, director of metals trading at High Ridge Futures.
The 25% tariffs imposed by Trump on Canadian and Mexican imports from Tuesday, along with a 10% charge on Chinese goods, fuelled fears of a trade war that could slow global growth and feed inflation.
Canada and Mexico ordered retaliatory measures while China said it would challenge the tariffs at the World Trade Organization and take unspecified countermeasures.
However, Trump announced a month-long pause on tariffs the U.S. had slapped on Mexico.
The market is not fully convinced about the extent of the trade war, Bart Melek, head of commodity strategies at TD Securities, said.
“We haven’t seen a complete response from gold and if this trade war continues for a considerable period, it could lead to significantly higher gold prices down the road,” Melek added.
Gold is often considered as a safe-haven investment during periods of economic or geopolitical instability.
Investors await data this week on U.S. job openings, the ADP employment report and the U.S. employment report to gauge the health of the U.S. economy.
Meanwhile, bullion banks are transporting gold from Asian trading hubs like Dubai and Hong Kong to the U.S. to profit from the unusually high U.S. gold futures premium over spot prices.
Spot silver rose by 0.8% to $31.56 an ounce, platinum lost 1.5% to $963.40 and palladium rose 0.5% at $1,012.85.
Source: Reuters
Gold Holds Near Record High as Tariff Confusion Helps Bid for Higher Valuable Assets |
Gold held steady near a record high as President Donald Trump’s tariff threats and subsequent delays raised uncertainty and supported higher demand for valuable assets.
Bullion hit an all-time peak above $2,830 an ounce on Monday before paring gains to close up 0.6% after Trump said he would temporarily suspend 25% levies on Canada and Mexico for a month. The abrupt change sent the dollar retreating from its highest level in more than two years, making the precious metal cheaper for most buyers.
There is still a lot of uncertainty in the market about what will happen, tempering gold’s appeal as a store of value in an unpredictable environment. Washington is set to impose 10% tariffs on Chinese imports starting Tuesday in the U.S., though Trump has said he will talk to Beijing about the proposed duties. Among the biggest questions are how resilient the U.S. economy is to be to a trade war — if it materializes — and the ripple effects for monetary policy if tariffs reignite inflation. The Federal Reserve paused interest rate cuts last month, adopting a “wait and see” approach to the new administration’s policies.
Spot gold fell 0.1% to $2,813.37 an ounce as of 8:14 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.2% after rising 1.1% over the previous six sessions. Silver slid, while platinum and palladium rose.
Trade war fears had been roiling precious metals markets even before the turmoil of the past few days. U.S. gold and silver prices have surged above international benchmarks in recent weeks, sending traders and dealers rushing to bring large amounts of the metal into the U.S. before any tariffs take effect. The turmoil has also led to a surge in gold and silver rental rates — the profits that holders of bullion in London vaults can make by lending out the precious metals on a short-term basis. Rifan Financindo.
Source: Bloomberg