Gold Gains as Trump Threatens Tariffs on Mexico and Canada
Gold prices edged higher after President Donald Trump announced plans to impose tariffs on Mexico and Canada next month. The announcement stoked fears of a potential trade war among the North American neighbors.
Trump also hinted at the possibility of a universal tariff on all foreign imports, but indicated it was not an immediate priority.
Mexico is the largest producer of silver, and the impact of tariffs on the metal remains unclear. However, the potential impact of tariffs on both gold and silver has created volatility in recent weeks, driving premiums higher for futures contracts.
Investors are also considering the inflationary implications of Trump's policies, which include tax cuts and increased spending. These measures could exert upward pressure on prices, potentially limiting the Federal Reserve's ability to continue easing monetary policy, which can be unfavorable for non-interest-bearing assets like gold.
Gold reached several record highs in 2024, driven by the Fed's dovish stance, geopolitical tensions, and central bank buying. Concerns over immigration policy and heightened tensions with other nations could provide further support for the metal as investors seek safe-haven assets.
At the time of writing, spot gold was up 0.4% to $2,718.81 an ounce in Singapore. Silver, platinum, and palladium declined in value.