XAUUSD – Daily Chart
Gold Prices Hit Record Highs Despite Strong Dollar
Gold prices (XAUUSD) surged to unprecedented levels on Monday, defying a stronger U.S. dollar after President Donald Trump announced fresh trade tariffs targeting commodity imports. The escalating trade tensions fueled investor demand for safe-haven assets, particularly gold.
As of 3:30 p.m. ET (20:30 GMT), spot gold climbed 1.5% to $2,904.19 per ounce, after reaching an all-time high of $2,911.44 earlier in the day. Gold futures for April delivery also soared, rising 1.6% to $2,933.61 per ounce.
U.S. Tariff Announcements Drive Gold Demand
The surge in gold prices follows President Trump’s announcement on Sunday of a 25% tariff on all aluminum and steel imports to the U.S. This move has heightened concerns over potential disruptions to global trade, prompting investors to flock to gold as a reliable hedge against economic uncertainty.
Additionally, Trump indicated plans for reciprocal tariffs, aiming to align U.S. import duties with those of its trading partners. This announcement closely follows the implementation of a 10% tariff on Chinese imports, which triggered retaliatory measures from Beijing.
Escalating Trade War Fuels Economic Concerns
The new tariffs have intensified fears of an escalating trade war between the world’s largest economies. Analysts warn that prolonged trade conflicts could stifle global economic growth and disrupt international trade flows.
“Gold has already surged over 10% year-to-date, achieving consecutive record highs. Concerns over tariffs potentially driving higher inflation and slower economic growth are boosting demand for safe-haven assets like gold,” noted analysts at ING.
Precious Metals Market Sees Broad Gains
The rally in gold prices also lifted other precious metals. Silver futures edged up 0.1% to $32.468 per ounce, while platinum futures advanced 1.3% to $1,034.40 per ounce.
Impact on Industrial Metals Amid Market Uncertainty
Industrial metals faced mixed reactions amid the tariff news. Benchmark copper futures on the London Metal Exchange remained flat at $9,468.00 per ton, whereas March copper futures gained 2.4% to $4.7008 per pound.
“With Trump back in the White House, market volatility and unpredictability are at heightened levels. Ongoing trade disputes are likely to dampen global growth and weaken demand for industrial metals,” ING added.
Federal Reserve, Inflation Data in Focus
Looking ahead, Federal Reserve Chair Jerome Powell is scheduled to deliver his semiannual monetary policy testimony before Congress on Tuesday and Wednesday. Market participants will closely monitor his comments for insights into how potential tariffs might impact the U.S. economy.
Economists and Federal Reserve officials have cautioned that the new tariffs, which will primarily affect U.S. importers, could contribute to rising inflation, reducing the likelihood of interest rate cuts. Additionally, January’s Consumer Price Index (CPI) inflation data, set to be released later this week, is expected to influence future interest rate decisions.
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