Gold hits a record high above $2,900 an ounce early Monday on U.S. President Donald Trump’s promised steel and aluminum tariffs, with plans to officially announce them later today, with the duties taking effect almost immediately.
The tariff threat, made Sunday, boosted haven demand for gold. Trump said the duties would include a blanket 25% tariff on steel and aluminum imports as well as reciprocal tariffs on “every country.”
April gold futures rose 1.9% last week to $2,887.60 an ounce on Comex, after the most-active contract advanced 0.4% Friday. Bullion increased 7.3% last month after dropping 1.5% in December and losing 2.5% in November. The metal gained 27% in 2024, its biggest annual gain since 2010. The April contract is currently up $42.20 (+1.46%) an ounce to $2929.80 and the DG spot price is $2909.20.
The yellow metal has attracted risk-off demand from investors seeking refuge from Trump’s policies on trade, the Middle East, and immigration. Citigroup last week forecast that gold prices would reach a record $3,000 an ounce within three months on geopolitical tensions and Trump’s trade wars.
Investors were also closely watching economic reports for any signal of weakness that could cause the Federal Reserve to change its stance on monetary policy.
The key U.S. monthly jobs report on Friday showed that the labor market remains resilient, with the unemployment rate unexpected falling to 4% in January from 4.1% the previous month. The figure its at its lowest level since May 2024. However, the U.S. economy created 143,000 new jobs last month, less than the 170,000 forecast by economists and lower than December’s 307,000. The Fed closely watches both the labor market and inflation when setting monetary policy.
Fed policymakers unanimously agreed last month to keep their benchmark interest rate at 4.25% to 4.50%. It was the central bank’s first policy meeting since July without a rate cut. The Fed cut rates three times last year, reducing its benchmark interest rate in September, November and December. Previously, the Fed had kept rates at 5.25% to 5.50% for a year after raising them by 5.25 percentage points since March 2022 to combat inflation.
High interest rates are considered bearish for gold, while low rates and rate cuts are bullish.
Most investors aren’t pricing in a Fed rate reduction until June at the earliest, according to investors tracked by the CME FedWatch Tool. About 83.5% expect rates to remain unchanged in March, compared with 6.5% anticipating a 25 basis point cut. About half expect a rate cut in June, with even more anticipating one by July.
Front-month silver futures rallied 0.6% last week to settle at $32.44 an ounce on Comex, though the most-active March contract decreased 0.6% Friday. Silver added 10% last month after dropping 6% in December and falling 5.1% in November. It gained 21% in 2024. The March contract is currently up $0.092 (+0.28%) an ounce to $32.535 and the DG spot price is $32.25.
Spot palladium lost 4.6% last week to $986.00 an ounce after slipping 50 cents Friday. Palladium advanced 11% last month after falling 6.7% in December and sliding 12% in November. Palladium dropped 17% last year. Currently, the DG spot price is up $23.60 an ounce to $999.00.
Spot platinum dropped 0.2% last week to $988.30 an ounce after losing 0.9% Friday. Platinum gained 8.4% in January after losing 4.6% in December and declining 4.2% in November. Platinum slid 8.4% in 2024. The DG spot price is currently up $11.50 an ounce to $998.30.
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