Gold Rises to Fresh Record as Trump Tariffs Trigger Haven Demand
Gold rose to a new all-time high amid a rush to safer assets after US President Donald Trump imposed tariffs on Canada, Mexico and China, while threatening to do the same against the European Union.
Bullion advanced by as much as 1% to $2,825.38 an ounce, surpassing the previous record reached Friday. Concerns about the impact of Trump’s policies on the global economy led investors to seek havens like gold and the Japanese yen, while global stocks and crypto currencies slumped.
Earlier, the precious metal fell as the dollar rose and the inflationary impact of tariffs could keep borrowing costs elevated. Both high interest rates and a strong US currency are headwinds for gold, but the greenback pared some of its gains.
The US announced tariffs of 25% on goods from Canada and Mexico, and 10% on those from China, set to take effect Tuesday. Canadian energy imports will face a 10% levy. Ottawa unveiled a 25% counter-tariff on US goods, Mexico pledged retaliatory actions and Beijing issued a statement vowing “corresponding countermeasures.” Trump has also threatened tariffs against the European Union, which said it would respond firmly.
“These tariffs create a strong tailwind for gold,” Bank of Montreal analysts wrote in a note. “Not only because of their inherent inflationary effects but also as the USA’s increasingly hawkish foreign policy may accelerate de-dollarisation plans.”
Trade war fears have already jolted precious metals markets, with US prices of gold and silver surging above international benchmarks in recent weeks, causing dealers and traders to rush huge volumes of the metals into the US before any tariffs are imposed. The chaos has also led to a spike in lease rates for gold and silver — the return that holders of bullion in London’s vaults can get by loaning metal out on a short-term basis.
Spot gold rose 1% to $2,827.11 an ounce as of 13:51 p.m. in London, after climbing 1% last week. The Bloomberg Dollar Spot Index rose 0.8%%, after jumping as much as 1.3% earlier. Silver gained, while platinum and palladium fell.
Source : Bloomberg
