Rifan Financindo – Gold Prices Rise to Record High as Trump Tariffs Help Safe-Haven Bid
Gold prices rose to a record high after President Donald Trump said he would announce tariffs on steel and aluminum imports on Monday, adding to uncertainty in global financial markets.
Bullion prices were trading near $2,869 an ounce — after rising 2.2% last week — as the president’s latest trade threats helped boost demand for the safe-haven asset. Trump said Sunday that the 25% levies would apply to steel and aluminum from all countries, but did not specify when they would take effect.
Traders will also be focusing on Federal Reserve Chairman Jerome Powell’s semi-annual testimony to lawmakers on Tuesday and Wednesday for clues on the path forward for U.S. monetary policy. Powell is likely to highlight a resilient economy as a key reason the central bank is in no rush to cut borrowing costs further — a scenario that would theoretically be bad for bullion since it doesn’t pay interest. Still, the metal’s role as a store of value in uncertain times continues to drive investor interest, with markets trying to understand the potential implications for the U.S. economy and monetary policy if the new administration’s trade and immigration policies rekindle inflation and crimp growth.
China’s central bank expanded its gold reserves for a third month in January, signaling a continued commitment to diversifying reserves even with prices at historic highs.
Spot gold rose 0.3% to $2,869.09 an ounce as of 8:09 a.m. in Singapore, after hitting an all-time high of $2,886.79 on Friday. The Bloomberg Dollar Spot Index rose 0.2%. Silver was steady, while platinum and palladium fell.
Source: Bloomberg
Gold poised for sixth week of gains on safe-haven demand
Gold prices rose on Friday and were on track for a sixth consecutive week of gains as escalating trade tensions between the U.S. and China prompted investors to seek refuge in the safe-haven asset.
Spot gold gained 0.6% to $2,873.63 per ounce as of 09:33 a.m. ET (1433 GMT), rising more than 2% this week.
U.S. gold futures added 0.7% to $2,897.50.
“Central focus of the gold market continues to be the uncertainty in regards to the Trump tariff policies,” said David Meger, director of metals trading at High Ridge Futures.
Earlier this week, U.S. President Donald Trump kick started a trade war as he followed through on his threat to impose duties on China. Meanwhile, Trump granted Mexico and Canada a one-month reprieve.
Gold, used as a safe investment during times of political and financial uncertainty, rose to an-time high of $2,882.16 on Wednesday amid trade war concerns.
Meanwhile, A Labor Department report showed the U.S. economy added 143,000 jobs in January, compared with a rise of 170,000 expected by economists, whereas the unemployment rate stood at 4%, compared with the expectations of 4.1%.
Wage growth and declining job creation reflects market uncertainties and potential inflation, and challenging the Federal Reserve’s ability to adjust rates, actively shaping a uniquely complicated yet potentially advantageous situation, said Bart Melek, head of commodity strategies at TD Securities.
A strong economy with full employment and easing inflation allows the Fed to cut rates, but tariff uncertainties call for caution, Chicago Fed President Austan Goolsbee said.
Elsewhere, China will allow some of its insurance funds to buy gold for medium- and long-term asset allocations as part of a pilot project, the country’s financial regulator said.
Spot silver rose 0.7% to $32.41 per ounce and platinum added 0.7% to $992.15. While palladium fell 0.8% to $970.50. Rifan Financindo.
Source: Reuters