Gold Races to Record Highs after Trump's Tariff Threats

(FILES) A photograph taken on April 30, 2024 shows gold bracelets displayed in a shop window on Green Street, east London. (Photo by James RYBACKI / AFP)

Gold climbed more than 1% on Monday, as US President Donald Trump's latest tariff plans heightened fears of a global trade war, fueling demand for the safe-haven metal and pushing bullion prices to record highs.
Spot gold was up 1.2% at $2,895.38 per ounce, as of 0758 GMT. Earlier in the session, bullion hit an all-time high of $2,896.35, marking its seventh record this year. US gold futures also climbed 1.2% to $2,920.8, Reuters reported.
"Trump announcing new tariffs is supporting inflation and growth concerns, lifting the yellow metal. We look for further price support, with gold heading to $3,000/oz," UBS analyst Giovanni Staunovo said.
Trump said during the weekend that he will announce new 25% tariffs on Monday on all steel and aluminium imports into the US, which would come on top of existing metal duties in another major escalation of his trade policy overhaul.
Trump also said he will announce reciprocal tariffs on Tuesday or Wednesday, to take effect almost immediately, applying them to all countries and matching the tariff rates levied by each country.
"The potential of gold also getting caught up in the tit-for-tat tariffs is causing a dislocation in the physical market," said Daniel Hynes, senior commodity strategist, ANZ bank.
Federal Reserve officials on Friday noted the lack of clarity over how Trump's policies will affect economic growth and still-elevated inflation, underscoring their no-rush approach to rate cuts as US job market remains solid.
Gold is considered a safe investment during economic and financial turmoil, although higher interest rates reduce the non-yielding asset's appeal.
"I don't see any high probability of a correction yet (in gold) at this juncture, unless we start to see a kind of a very strong US dollar push up," said Kelvin Wong, OANDA's senior market analyst for Asia Pacific.
Spot silver gained 1% to $32.14 per ounce, after rising to its highest level since November on Friday. Platinum added 0.8% to $983.86 and palladium gained 0.6% to $970.15.