Global gold endured a volatile few hours’ trading — rallying to a record, then paring gains — after President Donald Trump imposed tariffs on US steel and aluminum imports, adding to uncertainty in global markets.
Bullion set a fresh peak above $2,942 an ounce, before retracing much of its advance. 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 United States. He also warned the tariffs “may go higher.”
The precious metal has surged about 11% this year, setting successive records, as Trump’s disruptive moves on trade and geopolitics reinforces 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 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.
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 $3,000 an ounce is in the offing. Among them, Citigroup Inc said last week it expected gold to hit that level within three months, with geopolitical tensions and trade wars boosting demand. At JP Morgan Private Bank, the year-end target is $3,150 an ounce, according to Global Market Strategist Yuxuan Tang.
Spot gold was up 0.2% at $2,915.01 an ounce at 11.07am in Singapore (10.07am Thailand time), after rising to as much as $2,942.68. The Bloomberg Dollar Spot Index added 0.1% after climbing 0.2% on Monday. Silver and platinum fell, while palladium was flat.
Some market metrics suggest that bullion’s surge may be overdone, signaling that a pause may be due. Gold’s 14-day relative-strength index — a gauge of the pace and intensity of moves — approached 80, far above the level of 70 that some analysts regard as overbought.
The precious metal’s gains have boosted producers’ shares. In Hong Kong, Zijin Mining Group Co spiked by more than 4% to hit the highest level since November, while in Australia, Northern Star Resources Ltd touched a record, up by about a fifth this year.
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. Asia’s largest economy also announced a pilot program 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 ($27.4 billion) of funds, according to Minsheng Securities Co.