Gold was steady near a record high as US President Donald Trump’s tariff threats and subsequent delays boosted uncertainty and supported haven demand.
Bullion reached an all-time peak above US$2,830 ($3,236.55) an ounce on Monday before paring gains to close up 0.6% after Trump said he would pause levies of 25% against Canada and Mexico by a month. The abrupt about-face saw a gauge of the dollar retreat from the highest level in more than two years, making the precious metal cheaper for most buyers.
There’s still plenty of uneasiness in markets about what lies ahead, burnishing gold’s appeal as a store of value in a hard-to-predict environment. Washington is set to impose a 10% tariff against Chinese imports from Tuesday in the US, although Trump said he would speak to Beijing regarding the proposed duties.
Among the biggest questions are how resilient the US economy would be to a trade war — if it materialises — as well as the ripple-on effects for monetary policy if tariffs reignite inflation. The Federal Reserve paused rate cuts last month, adopting a “wait-and-see” approach with regards to the new administration’s policies.
Spot gold dipped 0.1% to US$2,813.37 an ounce as of 8.14am in Singapore. The Bloomberg Dollar Spot Index dipped 0.2% after rising 1.1% over the previous six sessions. Silver slipped, while platinum and palladium rose.
Trade war fears had jolted precious metals markets even before the shenanigans over the last few days. US prices of gold and silver have surged above international benchmarks in recent weeks, causing dealers and traders to rush huge volumes of the metals into the US before any tariffs are imposed.
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The chaos has also led to a spike in lease rates for gold and silver — the return that holders of bullion in London’s vaults can get by loaning metal out on a short-term basis.
