Gold Hits New High on Trump Tariff Worries; US Inflation in Focus

31 Jan 2025 , 09:42 AM

President Donald Trump reiterated his warning to Mexico and Canada on Thursday, announcing that the United States would impose a 25% tariff on their imports.

Since bullion is typically viewed as a hedge against price pressures and geopolitical instability, the safe-haven demand for it has increased as a result of Trump’s tariff plans, which are largely viewed as inflationary and might lead to trade wars.

Spot gold was up 0.1% at $2,795.92 an ounce, up almost 1% for the week. Prices reached an all-time high of $2,799.71 earlier in the session.

Since late November, 12.9 million troy ounces of gold have been sent to COMEX-approved warehouses amid worries about Trump’s tariff intentions, increasing their storage levels by 73.5% to 30.4 million ounces, the largest level since July 2022.

Investors now await the December U.S. personal consumption expenditures (PCE) price index report due later in the day.

U.S. economic growth slowed in the fourth quarter, according to data released Thursday, but it was still strong enough for investors to anticipate that the Fed will only gradually decrease rates this year.

The Fed held interest rates unchanged on Wednesday, and Chair Jerome Powell stated that the timing of any rate reductions will depend on inflation and employment data.

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