Gold prices hit record high amid Trump’s tariff threats
Gold prices reached a new record after US President Donald Trump announced plans to impose tariffs on steel and aluminium imports, creating further uncertainty in global financial markets.
The price of bullion surged beyond US$2,895 an ounce following a 2.2% increase last week, driven by heightened demand for safe-haven assets amid the president’s trade threats. Trump indicated on February 9 that 25% levies would be imposed on steel and aluminium from all countries, though the timing was unspecified.
Westpac Banking Corp analyst Richard Franulovich noted that gold remains in a sweet spot, with little standing in its way.
“An intrinsically unpredictable and disruptive Trump, hurtling tariff threats at allies and adversaries alike, alongside the threats of 100% tariffs on the BRICs if they diversify away from the dollar, all point to a lift in gold’s safe-haven appeal.”
Attention will also be on Federal Reserve Chair Jerome Powell’s semi-annual testimony to lawmakers today and tomorrow, which may provide insights into future US monetary policy.
Powell is expected to emphasise the economy’s resilience, suggesting that central bankers are not eager to further reduce borrowing costs, a situation that could theoretically be unfavourable for gold as it does not pay interest.
Despite this, gold continues to attract investors as a store of value in uncertain times, with markets assessing the potential effects on the US economy and monetary policy if the administration’s trade and immigration policies reignite inflation and affect growth.
China’s central bank increased its gold reserves for the third consecutive month in January, indicating an ongoing commitment to diversifying holdings even as prices remain high.
Additionally, Asia’s largest economy announced a pilot programme allowing 10 major insurers to invest up to 1% of their assets in bullion for the first time, which could equate to a potential 200 billion yuan (approximately 27.4 billion baht) (US$803 million), according to Minsheng Securities Co, reported Bangkok Post.
As of 7.41am in London, spot gold increased by 1.1% to US$2,893.55 an ounce.
Meanwhile, the Bloomberg Dollar Spot Index rose by 0.2%, with silver and platinum prices advancing, while palladium experienced a slight decline.
Latest Thailand News
