Knock! Gold Hits New All-Time High
Gold rose to a new record of $2,892 after President Donald Trump said he would announce tariffs on steel and aluminum imports on Monday, adding to growing uncertainty in global financial markets.
Bullion was trading near $2,888 an ounce — after rising 2.2% last week — as the president’s latest trade threats helped boost demand for higher-yielding assets. Trump said Sunday that levies of 25% would apply to steel and aluminum from all countries, but did not specify when they would take effect.
“Gold remains in a favorable position, with few headwinds,” Westpac Banking Corp. analyst Richard Franulovich said in a note. “Trump’s inherently unpredictable and disruptive nature, hurling tariff threats at allies and adversaries alike, alongside threats of 100% tariffs on the BRICs if they diversify away from the dollar, all point to increased appeal of gold as a higher-yielding asset.”
Traders will also be focused on Federal Reserve Chairman Jerome Powell’s semi-annual testimony to lawmakers on Tuesday and Wednesday for clues on the path forward for U.S. monetary policy. Powell is likely to highlight a resilient economy as a key reason why central bankers are in no rush to cut borrowing costs further — a scenario that would theoretically be bearish for bullion, which pays no interest.
Still, the metal’s role as a store of value in uncertain times continues to drive investor interest, with markets trying to get a sense of the potential implications for the U.S. economy and monetary policy if the new administration’s trade and immigration policies reignite inflation and hurt growth.
China’s central bank expanded its gold reserves for a third month in January, signaling a continued commitment to diversifying reserves even with prices at historic highs.
Source: Bloomberg
