Gold Surges as Trump's Trade and Immigration Policies Raise Economic Concerns
Gold prices have surged to their highest intraday level since November, as traders navigate economic uncertainty amid President Trump's evolving stance on trade and immigration.
Market Reaction to Trump's Policies
Bullion has witnessed a recent surge, with a 1.4% jump in the previous session, as Trump's tariff threats have increased demand for safe-haven assets. Trump has indicated a potential 10% levy on Chinese goods and plans to impose import duties on Canada and Mexico.
Impact on Monetary Policy
Investors are closely monitoring the potential implications of the Trump administration's tariff and tax cut policies, which could potentially strain national finances and escalate inflation. This may limit the Federal Reserve's ability to continue its accommodative monetary policy. Higher borrowing costs historically pose a challenge for gold, as it does not offer interest returns.
Historical Gains and Future Outlook
Gold experienced record highs in 2024, driven by the Fed's shift towards a looser monetary policy, geopolitical tensions, and central bank purchases. The precious metal is poised for further growth due to demand for safe-haven assets amid concerns about the new administration's immigration policy and potential diplomatic challenges with other nations.
Market Update
At the time of writing (6:12 a.m. London time), spot gold has risen 0.3% to $2,754.04 per ounce. Silver, platinum, and palladium prices have also increased. The Bloomberg Dollar Spot Index remains relatively stable.