Gold Near Record High As Trump’s China Comments Hit Dollar
Gold rose near a record high as the dollar weakened after President Donald Trump signaled a less aggressive approach toward China.
Bullion traded near $2,770 an ounce, the highest since October when it hit a previous record high. Trump said he would “prefer not to have to use” levies on China, in an interview aired on Fox News on Thursday in the U.S. The dollar gauge fell as much as 0.7%, making the precious metal cheaper for most buyers.
Gold is up nearly 3% this week, largely on safe-haven demand amid uncertainty over the global economic outlook under the new U.S. administration. Tariffs should benefit gold, even with a stronger dollar, said Joni Teves, a strategist for UBS Group AG. “We expect investors to be willing to see a stronger dollar,” Teves wrote in a note, adding that gold will draw demand as a safe haven and diversifier in a period of macro volatility and uncertainty.
Traders have been glued to Trump’s comments on trade and tariffs since he took office. The president has identified China, the European Union, Canada and Mexico as potential targets for import levies, raising concerns about how other governments might respond. Trump on Thursday told attendees at the World Economic Forum in Davos via video that he intends to hit Europe with import levies in an effort to bring manufacturing back to the U.S.
The president also said he would demand an immediate cut in U.S. interest rates. While lower borrowing costs are typically a boon for precious metals, traders are cautious because monetary policy is set by the Federal Reserve alone. The central bank will make its rate decision next week.
Gold hit a series of records last year, with gains driven by the Fed’s pivot to cut rates, geopolitical tensions and central bank purchases. Traders are also now focused on Trump’s domestic agenda, including his pledge to cut taxes and overhaul immigration. Those moves could strain the nation’s finances and reignite inflation, potentially complicating the Fed’s rate-cutting path.
Spot gold rose 0.7% to $2,774.08 an ounce at 10:09 a.m. in London, not far from its record of $2,790.10 an ounce. Silver, palladium and platinum all rose.
Source: Bloomberg
