NEW YORK: Gold rose on Monday and hovered near record-high levels touched in the previous session, as investors sought refuge in the safe-haven asset after US President Donald Trump’s fresh tariff plans sparked fears of a global trade war.
Spot gold was up 0.8% at $2,882.50 per ounce, as of 0610 GMT, after hitting a record high of $2,886.62 on Friday. US gold futures rose 0.7% to $2,908. Trump on Sunday said 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. “Global trade tension is still pretty much at play and could drive gold prices to $2,900 to $2,910 level in the near term,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.
“I don’t see any high probability of a correction yet at this juncture, unless we start to see a kind of a very strong US dollar push up.” Gold is considered a safe investment during economic and financial turmoil, but higher interest rates reduce the non-yielding asset’s appeal. “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 said on Friday the US job market is solid and 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. Spot silver rose 0.6% to $32.00 per ounce and platinum added 0.3% to $979.06. Palladium gained 0.3% to $967.74.
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