Gold Reaches Record Highs as Trump’s Tariffs Boost Demand
Gold prices surged to all-time highs on Monday, driven by increased safe-haven demand following U.S. President Donald Trump’s announcement of new tariffs on Canada, China, and Mexico. The move has heightened concerns that inflation could hamper economic growth.
Spot gold rose 0.6% to $2,817 per ounce after hitting a record high of $2,830 earlier in the session. U.S. gold futures climbed 0.9% to $2,860.40.
Despite the typically dampening effect of a strong dollar on gold, prices have been rising as investors seek shelter from uncertainty surrounding Trump’s tariffs.
The 25% tariffs on Canadian and Mexican imports, set to take effect Tuesday, along with a 10% levy on Chinese goods, have fueled fears of a trade war that could slow global growth and drive inflation higher.
Mexico and Canada Tariff Retaliation
In response, Canada and Mexico announced retaliatory measures, while China vowed to challenge the tariffs at the World Trade Organization and take unspecified countermeasures.
However, Trump later announced a one-month pause on the U.S. tariffs targeting Mexico.
The market is not yet fully convinced of the scale of the trade war. We haven’t seen a complete reaction from gold. If this dispute drags on, gold prices could climb significantly higher in the future.
Gold is traditionally viewed as a safe-haven investment during periods of economic or geopolitical instability.
Investors are now awaiting key U.S. economic data this week, including job openings, the ADP employment report, and the U.S. nonfarm payrolls report, to gauge the health of the economy.
Among other precious metals, spot silver gained 1% to $31.60 per ounce, platinum fell 1.4% to $964, and palladium rose 0.6% to $1,013.75.
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