Gold Price Flirts With Record High On Trump’s China Remarks
Gold rose close to a record high after US President Donald Trump signaled a less aggressive approach to China, weakening the dollar.
Bullion traded near $2,780 an ounce, the highest since it touched an all-time high in October. Trump said he’d “rather not have to use” levies against China during an interview that aired on Fox News on Thursday. A gauge of the dollar fell as much as 0.7%, making the precious metal cheaper for most buyers.Gold is up almost 3% this week, mainly on haven demand amid uncertainty over the global economic outlook. New US-imposed tariffs would benefit gold even in spite of accompanying dollar strengthening, according to Joni Teves, a strategist for UBS Group AG.
“We expect investors to be willing to look through dollar strength,” Teves wrote in a note, adding that gold would draw demand as a safe haven and diversifier in a period of volatility and macro uncertainty.
Traders have been glued to Trump’s commentary on trade and tariffs since he took office earlier this week. The president has identified China, the EU, Canada and Mexico as potential targets for import levies, raising concerns about how other governments might respond. Trump on Thursday told the World Economic Forum in Davos via video that he intends to hit Europe with import levies in a bid to bring manufacturing back to the US.
The US president also said he would demand an immediate drop in interest rates. While lower borrowing costs are typically bullish for precious metals, traders were cautious as monetary policy is set by the Federal Reserve alone.
Bullion also got support from the latest data that showed US business activity expanding at the slowest pace in nine months on a pullback in the pace of growth at services providers. That may strengthen the case for the Fed to continue carrying out rate cuts. The US central bank is due to make a rate decision next week.
Gold set a series of records last year, with gains driven by the Fed’s pivot to cutting rates, geopolitical tensions and central-bank buying. Traders are now also focusing on Trump’s domestic agenda, including his pledges to cut taxes and overhaul immigration. Such moves may erode the nation’s finances and reignite inflation, potentially complicating the Fed’s rate-cutting path.
Spot gold rose 1% to $2,783.74 an ounce as of 10:18 a.m. in New York, not far short of its record of $2,790.10. Silver, palladium and platinum all gained.
