Gold prices edged lower on Tuesday after climbing over 2% in the past two sessions toward its record high. The precious metal was trading near $2,912 per ounce, roughly $40 shy of its all-time peak reached last week. This rise in gold was fueled by a surge in demand for safe-haven assets following President Donald Trump’s aggressive tariff strategy, which escalated tensions in global trade.
Trump’s decision to double tariffs on China and impose 25% levies on both Canada and Mexico intensified fears of a global economic slowdown, further driving gold’s appeal as a hedge against uncertainty. However, US Commerce Secretary Howard Lutnick suggested that there could be some relief for the US’s two North American neighbors, hinting on Fox Business that there might be a way to reduce some of these tariffs.
The growing concern over trade wars’ potential to stoke inflation and curb global growth has bolstered gold’s demand as a store of value. The yellow metal has surged over 40% since the end of 2023, as investors seek safety in turbulent times. Bond traders are increasingly anticipating that the tariffs will disrupt the US economy, with a JPMorgan Treasury client survey revealing net bullish positions at their highest level in 15 years.
In retaliation, both Canada and China imposed their own tariffs on Tuesday. Canada announced phased levies on $107 billion worth of US goods, while China imposed duties of up to 15% on US agricultural exports. Mexican President Claudia Sheinbaum also signaled on Sunday that her government would soon unveil measures in response to Trump’s actions.
By 1:37 p.m. in Singapore, spot gold had dipped 0.2%, trading at $2,912.25 per ounce. The Bloomberg Dollar Spot Index remained unchanged, with silver and platinum holding steady, while palladium saw a slight increase.
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