Gold hit a record — rallying closer toward a test of US$3,000 ($4,071.76) an ounce — after US President Donald Trump imposed tariffs on US steel and aluminum imports, adding to uncertainty in global markets and stoking haven demand.
Bullion set a fresh peak above US$2,936 an ounce, after surging 1.7% in the previous session. Trump said on Monday that the latest round of levies, which go into effect on March 4, would bolster domestic production and bring more jobs to the US. He also warned the tariffs “may go higher.”
The precious metal has rallied almost 12% this year, setting successive records, as Trump’s disruptive moves on trade and geopolitics reinforce its role as a store of value.
Traders are also trying to get a read on the potential implications for the US economy and monetary policy should the White House’s policies reignite inflation and subdue growth.
Investors will be focused on US Federal Reserve Chair Jerome Powell’s testimony before Congress on Tuesday and Wednesday for clues about monetary policy.
Short-term US inflation expectations have risen above longer-term ones to the widest gap since 2023, with the so-called five-year breakeven rate reaching 2.64% on Monday. That may support the case for a slower pace of easing, a scenario that, in theory, would be bearish for bullion as it pays no interest.
See also: Goldman raises gold target to US$3,100 on central-bank appetite
Gold’s ascent has been accompanied by inflows into bullion-backed exchange-traded funds. Global holdings have risen for six of the past seven weeks, hitting the highest since November on Monday, according to a Bloomberg tally.
Banks have forecast that a test of US$3,000 an ounce is in the offing. Among them, Citigroup said last week it expected gold to hit that level within three months, with geopolitical tensions and trade wars boosting demand.
Elsewhere, China’s central bank expanded its gold reserves for a third month in January, signalling ongoing commitment to diversify holdings even with prices at historic highs.
See also: Gold hits fresh record on haven demand as tightness persists
Asia’s largest economy also announced a pilot programme to allow 10 major insurers to invest as much as 1% of their assets in bullion for the first time. That could translate into a potential 200 billion yuan ($37.16 billion) of funds, according to Minsheng Securities.
Spot gold traded 0.9% higher at US$2,933.39 an ounce as of 9.56am in Singapore, after rising to as much as US$2,936.06. The Bloomberg Dollar Spot Index added 0.1% after climbing 0.2% on Monday. Silver, platinum and palladium all edged higher.
