Gold holds steady near all-time high amid US tariff concerns

GOLD prices on Tuesday (Feb 4) hovered near a record high scaled in the prior session, as investors fretted that US President Donald Trump’s tariffs on Canada, China, and Mexico will fuel inflation and hinder economic growth.

Spot gold edged up 0.1 per cent to US$2,816.64 per ounce by 0052 GMT, after hitting a record high of US$2,830.49 in the last session. US gold futures fell 0.3 per cent to US$2,849.60.

Trump suspended tariffs on Mexico and Canada on Monday, agreeing to a 30-day pause in return for concessions on border and crime enforcement with the two countries, while tariffs on China are still in place.

There’s unlikely to be any official reaction from China to the tariffs before Wednesday, when China reopens after the Chinese New Year holiday. However, Beijing had said it would challenge Trump’s tariffs at the World Trade Organization. Levies on Chinese goods are due to start on Tuesday.

The market perceives the tariffs as inflationary, which could drive safe-haven demand for bullion as it is traditionally considered a hedge against both price pressures and geopolitical uncertainty.

Global bullion banks are flying gold into the United States from trading hubs catering to Asian consumers, including Dubai and Hong Kong, to capitalise on the unusually high premium that US gold futures are enjoying over spot prices.

Key economic data on investor radar this week includes the ADP employment report, US employment report, and Jolts job openings data due later in the day, which are expected to provide a clear picture of the economy’s strength.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.1 per cent to 865.63 tonnes on Monday from 864.77 tonnes on Friday.

Spot silver dropped 0.1 per cent to US$31.52 per ounce, platinum added 0.2 per cent to US$965.90, and palladium gained 0.4 per cent to US$1,013.67. REUTERS