(Bloomberg) — Gold steadied near a record high, after investors flocked to safety when US President Donald Trump reiterated threats to impose tariffs on Mexico and Canada.
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Bullion traded around $2,790 an ounce, after briefly topping $2,800 for the first time ever on Friday. The surge came after Trump said he would follow through on imposing 25% levies on imports from Canada and Mexico on Feb. 1. He also threatened China with tariffs, without specifying a level.
The precious metal, on track for its fifth consecutive weekly gain, has benefited from haven demand as Trump’s tariff threats spur fears of trade wars that could sap economic growth. There are also worries that his pledges to cut taxes and overhaul immigration may erode US finances and reignite inflation. Federal Reserve Chair Jerome Powell said Wednesday the US central bank was in a “wait-and-see” mode with regard to the potential impact of the new administration’s policies.
The Federal Open Market Committee left interest rates unchanged this week as expected — after cuts at each of the three previous meetings since September — and indicated that stalled progress toward lower inflation warranted a patient approach.
Traders now will be focused on the Fed’s favored inflation gauge, the personal consumption expenditures index — due later Friday. It’s expected to show a slight acceleration in price hikes, according to the median forecast of economists surveyed by Bloomberg.
Spot gold was mostly unchanged at $2,795.79 an ounce as of 11:15 a.m. in London. The Bloomberg Dollar Spot Index added 0.3%. Platinum rose, while silver and palladium were little changed.
–With assistance from Preeti Soni and Jack Ryan.
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Source: Gold Steadies Near Record High as Traders Weigh Tariff Threats
