Gold prices surged to a two-month high on Tuesday as investors sought safe-haven assets amid uncertainty surrounding U.S. President Donald Trump’s potential tariffs. Spot gold climbed 1.3% to $2,742.57 per ounce, nearing the all-time high of $2,790.15 set in October. The dollar index slipped 0.9%, making bullion less expensive for other currency holders.
Trump has hinted at the possibility of imposing duties on Canadian and Mexican goods as soon as Feb. 1, but has not provided specific details about the universal tariffs or extra surcharges on key trade partners. During Trump’s first administration in 2017, bullion logged a 13% yearly gain, its best annual performance in seven years.
However, Trump’s proposed policies are widely seen as inflationary, which could push the U.S. Federal Reserve to maintain higher interest rates for longer to curb price pressures. “The market is probably also looking ahead to next week’s FOMC meeting and Personal Consumption Expenditure (PCE) data, particularly the inflation read,” said Peter Grant, vice president and senior metals strategist at Zaner Metals. The recent surges in the price of gold have set new records in the UK with significant implications for global markets.
Gold climbs amid tariff jitters
Adrian Ash, director of research at BullionVault, highlights the key factors behind these new highs. Under Trump’s administration, policies have aimed to influence currency dynamics directly impacting gold prices.
The value of gold in GBP and CAD has reached unprecedented levels, reflecting heightened investor interest and market activity. Gold’s recent performance underscores its status as a safe-haven asset amid uncertain economic times. With ongoing global challenges, investors continue to flock to gold, driving its price to new records.
Ash notes, “The gold market reacts strongly to geopolitical and economic shifts. Investors view gold as a stable store of value, particularly during periods of high volatility.”
Looking ahead, experts advise caution. While the value of precious metals may continue to rise, historical trends do not guarantee future price moves.
Investors are encouraged to seek professional financial advice to make informed decisions about their portfolios.