Gold Nears Record as Trump Tariffs Ignite Haven Demand
Gold hovered near its highest level since October as traders assessed the potential impact of President Donald Trump's latest tariff threats against China and the European Union on the global economy.
The precious metal traded around $2,752 an ounce, less than $40 shy of its all-time high and up 2% this week. Its safe-haven status has been boosted by investors weighing the new administration's trade stance and the possibility of strained relations with other nations.
Trump has named China, the EU, Canada, and Mexico as potential targets for import duties, although the likelihood of these threats being carried out remains uncertain. Traders are also monitoring the broader implications of Trump's domestic policies, including tax cuts and immigration restrictions. Economists suggest these measures could potentially erode the nation's finances and stoke inflation.
The lack of clarity is expected to keep markets volatile and support gold's appeal as a safe haven, according to Pranav Mer, an analyst at JM Financial Services Ltd. Gold surged to a series of records last year, driven by the Federal Reserve's shift to rate cuts, geopolitical tensions, and central bank purchases.
Spot gold edged down 0.1% to $2,752.74 an ounce as of 8:07 a.m. in London. The Bloomberg Dollar Spot Index gained 0.1%. Silver, platinum, and palladium declined.