Athira Sethu
Kochi, 10 February 2025
During the weekend, U.S. President Donald Trump indicated that new tariffs would be imposed on all steel and aluminum imports into the United States at 25% beginning on Monday, which immediately alarmed investors considering a full-blown global trade war, bringing them towards gold investment, thus pushing prices higher.
Gold prices rose on Monday by 0.3% to the amount of $2,868.66 per ounce, close to the record of $2,886.62 set on Friday. U.S. gold futures gained 0.2% at $2,894.00.
The fresh tariffs introduced by Trump are in addition to the existing ones on metals and form part of his broader reshaping of U.S. trade policy, which he said would be directed toward an announcement of similar tariffs on other countries by Tuesday.
Market analysts, such as Kelvin Wong of OANDA, argue that these trade frictions might push gold prices even higher, reaching between $2,900 and $2,910. They nevertheless ruled out price drops unless the U.S. dollar surged significantly.
While gold is perceived as safe haven against instances of economic and financial global uncertainty, higher interest rates work against it, as it pays no interest. The greater indication is that the Fed believes that U.S. job markets seem still strong, while certain uncertainty exists with regard to the impact the President elect policies have on determining rate structure relative to what constitutes either economic growth or inflation. It points to the Fed adopting a more cautious posture regarding cuts.
Meanwhile, silver remained unchanged at $31.82 an ounce, platinum gave back 0.3% to $973.60, and palladium gained 0.4% toward $968.29.
