Gold prices rose to fresh record highs in Asian trade on Tuesday as persistent concerns over increased trade tariffs under U.S. President Donald Trump fueled safe haven demand.
The yellow metal vastly outpaced other metals, shrugging off strength in the dollar after Trump signed orders imposing 25% tariffs on all steel and aluminum imports to the U.S.
Trump also raised the prospect of more trade duties this week.
Increased geopolitical jitters also fueled gold demand, after Trump demanded Hamas return all Israeli hostages by this weekend, warning of dire consequences.
Spot gold hit a record high of $2,942.69 an ounce, while gold futures jumped to a peak of $2,968.39 an ounce, before trading slightly below the highs by 00:42 ET (05:42 GMT).
Gold rallies as Trump imposes 25% steel and aluminum tariffs
Trump on Monday signed an executive order imposing 25% tariffs on all steel and aluminum imports, the latest in his line of trade tariffs. The new tariffs will become effective by March 12.
The U.S. President said he could raise tariffs on the commodities further, and also said he will reveal plans for reciprocal tariffs against major U.S. trading partners this week.
This comes just a week after Trump slapped China with 10% tariffs, drawing ire and retaliation from Beijing.
Markets feared that more tariffs from Trump will escalate an already brewing trade war between the world’s biggest economies, sparking disruptions in global trade and denting economic activity. This notion pushed traders squarely into safe havens such as gold.
Traders also feared that Trump’s tariffs- which will be paid by U.S. importers- will underpin inflation in the coming months. Consumer price index inflation data for January, due on Wednesday, is set to offer more cues on inflation and interest rates.
Other precious metals were far less upbeat than gold, as the dollar firmed on Trump’s tariffs. Platinum futures fell slightly to $1,035.50 an ounce, while silver futures fell 0.5% to $32.343 an ounce.
Industrial metals were rattled by Trump’s tariffs, with benchmark copper futures on the London Metal Exchange falling 0.6% to $9,411.25 a ton. March copper futures fell 0.3% to $4.6788 a pound.
Trump threatens to let “all hell break loose” over Gaza hostages
Trump also ratcheted up concerns over Middle Eastern relations, after he threatened to let “all hell break loose” against Hamas if the militant group did not return all its Israeli hostages by Saturday.
Trump said if the hostages were not returned, he would propose cancelling the recently-signed Israel-Hamas ceasefire. This came after Hamas suspended the release of some Israeli hostages on allegations that Israel had violated the ceasefire.
Trump’s rhetoric on Israel and Hamas has ramped up concerns over a wider escalation in the Middle East conflict. He had earlier suggested displacing Palestinians living in Gaza to surrounding Arab countries- a move that was categorically rejected by Middle Eastern countries.
