Gold (XAU/USD) surged to an all-time high on Thursday, reaching $2,953.96 per ounce by 10:25 GMT, as traders reacted to fresh tariff threats from U.S. President Donald Trump. Safe-haven demand spiked after Trump confirmed 25% tariffs on automobiles, pharmaceuticals, and semiconductors would take effect within a month. He also raised the possibility of imposing the same levy on all lumber imports, fuelling fears of escalating trade tensions.
Trump’s latest tariffs add to a series of measures aimed at major trading partners, including a recent 10% tariff on China that prompted retaliation from Beijing. Despite suggesting a trade deal with China was still possible, Trump’s increasingly aggressive stance has unsettled markets, pushing investors towards assets like gold and the Japanese yen.
Gold briefly lost momentum on Wednesday as the U.S. dollar strengthened, following hawkish signals from the Federal Reserve’s January meeting. Policymakers expressed concern over persistent inflation, signalling that interest rate cuts may not come as soon as markets had hoped. Some officials also warned that Trump’s trade policies could add to inflationary pressures, making the Fed even more hesitant to ease policy.
Even with the dollar’s short-lived strength, gold remains in high demand as uncertainty over U.S. economic policy continues to dominate sentiment. The metal has been on a steady climb in recent months, with traders watching closely for further developments in the tariff dispute and the Fed’s stance on interest rates.
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