Gold prices surged to a new record high, approaching $3,000 per ounce, following U.S. President Donald Trump’s announcement of new tariffs on steel and aluminum imports. The tariffs, which will take effect on March 4, have added to global market uncertainty, driving increased demand for safe-haven assets like gold.
The precious metal reached a fresh peak above $2,936 per ounce after climbing 1.7% in the previous session. Trump’s decision to impose tariffs is seen as an effort to strengthen domestic production and create more jobs in the U.S., although he hinted that tariffs could be raised further.
Gold has gained nearly 12% this year, setting consecutive records as Trump’s disruptive trade policies and geopolitical actions underscore its role as a store of value. Traders are closely monitoring the potential economic consequences of these policies, particularly their impact on inflation and U.S. growth.
Investors are also waiting for insights into U.S. monetary policy, with Federal Reserve Chair Jerome Powell set to testify before Congress on Tuesday and Wednesday. Short-term U.S. inflation expectations have risen above longer-term ones, reaching their highest gap since 2023. The increased inflation outlook could signal a slower pace of Federal Reserve easing, which typically weakens gold as an asset that yields no interest.
Gold’s price increase has been accompanied by rising inflows into bullion-backed exchange-traded funds (ETFs), with global holdings reaching their highest level since November, according to a Bloomberg tally.
Some banks are now forecasting that gold could test the $3,000 per ounce mark in the near future. Citigroup Inc. predicted last week that gold would hit that level within three months, driven by geopolitical tensions and trade wars.
Meanwhile, China’s central bank continued to expand its gold reserves for a third consecutive month in January, signaling its ongoing strategy to diversify its holdings despite gold’s historic high prices. Additionally, China introduced a pilot program that will allow major insurers to invest up to 1% of their assets in gold, potentially unlocking 200 billion yuan ($27.4 billion) in new demand.
As of 9:56 a.m. in Singapore, spot gold traded 0.9% higher at $2,933.39 per ounce, after briefly reaching $2,936.06. Silver, platinum, and palladium also saw slight gains, while the Bloomberg Dollar Spot Index added 0.1%.
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