Gold Shines Amid Trade War Storm
Gold prices surged significantly in early Tuesday trading as investors turned to the metal as a safe haven amidst the escalating trade war. The conflict was further fueled by President Donald Trump imposing
25% tariffs on steel and aluminum imports, pushing gold prices to break the $2,942 per ounce mark for
the first time in history.
Price Update
By 0229 GMT, spot gold rose 1.1% to $2,939.80 per ounce after reaching a record high of $2,942.70
earlier in the session. Similarly, U.S. gold futures increased by 1.1% to $2,966, according to Reuters
data.
Trump’s decision to increase tariffs on steel and aluminum to 25% “without exemptions” aims to
support struggling industries but heightens the risk of a multi-front trade war.
“Global trade war risks are exerting pressure on gold trading… Buyers seem somewhat insensitive to
prices as traders do all they can to ship gold to the U.S. to avoid potential tariffs on the metal,” said Kyle
Rodda, a financial market analyst at Capital.com.
The tariff threats have triggered another wave of gold buying, pushing its price close to the $3,000
threshold.
Trump’s tariffs could lead to increased inflation in the U.S., with investors now awaiting the release of
the U.S. Consumer Price Index on Wednesday and the Producer Price Index on Thursday.
Federal Reserve Chairman Jerome Powell is scheduled to testify before Congress on Tuesday and
Wednesday.
Other Precious Metals
In contrast, silver in spot trading dipped by 0.5% to $31.87 per ounce. “While tariff concerns might
support silver, gains could be limited due to decreased industrial demand in the face of Trump’s tariffs,”
noted Lukman Otunuga, Senior Research Analyst at FXTM.
Platinum fell 0.7% to $986.46, while palladium rose slightly by 0.4% to $987.25.
