Gold Hits Record High as Trump Tariff Threats Boost Safe Haven Demand
Gold rose to a record high as investors flocked to safe havens after U.S. President Donald Trump repeated his threat to impose tariffs on Mexico and Canada.
Bullion briefly topped $2,800 an ounce for the first time on Friday after jumping 1.3% on Thursday and surpassing its previous peak set in October. The surge came after Trump said he would follow through on imposing 25% levies on imports from Canada and Mexico on Feb. 1. He also threatened China with tariffs, without specifying the level.
The precious metal, which is on track for a fifth straight weekly gain, has benefited from safe haven demand as Trump’s tariff threats stoke fears of a trade war that could weaken economic growth. There are also concerns that his promises to cut taxes and overhaul immigration could erode U.S. finances and reignite inflation. Federal Reserve Chairman Jerome Powell said Wednesday that the U.S. central bank is in “wait and see” mode regarding the potential impact of the new administration’s policies. The Federal Open Market Committee left interest rates unchanged this week as expected — after cutting them at each of its three previous meetings since September — and indicated that stalled progress toward lower inflation warrants a patient approach. Read More: Trump Tariffs Have Hampered U.S. Growth Before, and Threaten to Hamper It Again Elsewhere, traders will focus on the Fed’s favorite inflation gauge, the personal consumption expenditures index — due Friday.
It is expected to show a slight acceleration in price gains, according to the median forecast of economists surveyed by Bloomberg. Spot gold rose 0.1% to $2,796.83 an ounce as of 8:08 a.m. in London. The Bloomberg Dollar Spot Index rose 0.1%. Silver fell, while platinum and palladium were little changed.
Source: Bloomberg
