Trump also indicated he was still considering a universal tariff on all imports to the US, but said he was “not ready for that yet.”
Silver futures briefly spiked after Trump’s comments, with prices on contracts for delivery in March surging as much as 1.2% to US$31.525 an ounce before paring gains. Mexico is the top miner of silver, and it is unclear whether the tariffs would apply to imports of the metal.
Nevertheless, the possibility of both silver and gold being caught up in the sweeping tariff measures has whipsawed the market in recent weeks, driving premiums for futures deliverable in New York to elevated levels.
“The execution of Trump’s tariffs plan, and the risk-averse sentiment it triggers in the equity markets, will drive bullish momentum in gold,” Priyanka Sachdeva, an analyst at Phillip Nova, said in a note.
See also: Trump gives China a chance to win over world hit by tariffs
Investors were also weighing the outlook for inflation, with Trump’s domestic agenda of tax cuts and increased spending potentially pointing to ongoing price pressures this year. That may limit the US Federal Reserve’s (US Fed) ability to keep easing monetary policy. Higher borrowing costs typically pose a headwind for bullion, as it does not pay interest.
Gold set a series of records in 2024, with gains driven by the US Fed’s pivot to looser monetary policy, geopolitical tensions, and central-bank buying. The precious metal may yet receive a further boost from demand for haven assets amid concerns about the new president’s immigration policy, as well as scope for increasingly fraught US relations with other nations.
Spot gold was up 0.7% at US$2,727.10 an ounce at 7.27 am in London, after adding 0.2% on Monday. The Bloomberg Dollar Spot Index rose 0.4%. Palladium and platinum declined, while silver was steady.
