Gold rises to record high as Trump tariffs spur haven buying
PUBLISHED : 10 Feb 2025 at 15:47
- Small
- Medium
- Large
FILE PHOTO: Gold bullion is displayed at Hatton Garden Metals precious metal dealers in London, Britain July 21, 2015. (Reuters)
Gold rose to a record high after President Donald Trump said he would announce tariffs on steel and aluminium imports on Monday, adding to increasing uncertainty in global financial markets.
Bullion climbed to an all-time peak above $2,895 an ounce — after advancing 2.2% last week — as the president’s latest trade threats helped boost demand for haven assets. Trump said on Sunday that 25% levies will apply to steel and aluminium from all countries, but did not specify when they would go into effect.
“Gold remains in a sweet spot, with little standing in its way,” Westpac Banking Corp. analyst Richard Franulovich said in a note. “An intrinsically unpredictable and disruptive Trump, hurtling tariff threats at allies and adversaries alike, alongside the threats of 100% tariffs on the BRICs if they diversify away from the dollar, all point to a lift in gold’s safe-haven appeal.”
Traders will also focus on Federal Reserve Chair Jerome Powell’s semi-annual testimony to lawmakers on Tuesday and Wednesday for clues about the path forward for US monetary policy. Powell is likely to highlight the resilient economy as a key reason central bankers are in no rush to further cut borrowing costs — a scenario that in theory would be bearish for bullion as it pays no interest.
Still, the metal’s role as a store of value in uncertain times continues to drive investor appetite, with markets trying to get a read on the potential implications for the US economy and monetary policy if the new administration’s policies on trade and immigration reignite inflation and impact growth.
China’s central bank expanded its gold reserves for a third month in January, signalling ongoing commitment to diversify holdings even with prices at historically high levels. Asia’s largest economy also announced a pilot programme to allow ten major insurers to invest as much as 1% of their assets in bullion for the first time. That would translate into a potential 200 billion yuan ($27.4 billion) of funds, Minsheng Securities Co said in a note.
Spot gold rose 1.1% to $2,893.55 an ounce as of 7.41am in London. The Bloomberg Dollar Spot Index was up 0.2%. Silver and platinum advanced, while palladium edged lower.
This article was originally published by a www.bangkokpost.com . Read the Original article here. .