Gold Steadies Near Record High as Trump's Tariffs Spark Haven Demand
Gold remains near an all-time high as investors seek refuge amidst concerns over President Trump's proposed tariffs on Mexico and Canada.
Gold is currently trading at approximately $2,790 per ounce, having briefly exceeded $2,800 for the first time on Friday. The surge followed Trump's announcement of imminent 25% tariffs on imports from Canada and Mexico, effective February 1st. He also threatened China with unspecified tariffs.
Gold has benefited from safe-haven demand as Trump's tariff threats raise fears of trade wars and threats to economic growth. Additionally, concerns about his tax cuts and immigration policies potentially eroding US finances and fueling inflation have contributed to the precious metal's appeal.
Federal Reserve Chair Jerome Powell stated that the central bank is adopting a "wait-and-see" approach to the potential impact of the new administration's policies. However, the Federal Open Market Committee kept interest rates unchanged this week, indicating a cautious stance amidst stalled progress toward lowering inflation.
Traders now await the release of the Federal Reserve's preferred inflation gauge, the personal consumption expenditures index, later on Friday. Economists predict a modest acceleration in price hikes, potentially supporting gold's haven appeal.