Investing.com-- Gold prices hit fresh record Monday, shrugging off a rising dollar as after US President Donald Trump announced more trade tariffs, this time aimed at commodity imports, boosting demand for the safe-haven metal.
At 3:30 p.m. ET (20:30 GMT), Spot gold rose 1.5% to $2,904.19 an ounce after hitting a record high of $2,911.44 earlier in the day, while gold futures expiring in April rose 1.6% to $2,933.61 an ounce.
Tariffs sees gold demand soar
The yellow metal has soared to record levels after President Trump on Sunday said he will impose 25% trade tariffs on all imports of aluminum and steel to the US, sparking jitters over more headwinds to global trade.
Trump also flagged plans for reciprocal tariffs, which will see U.S. import duties increased to match those imposed by the country’s other trading partners.
The announcement came just days after Trump’s 10% tariffs against China took effect. Beijing had retaliated with its own trade measures against the tariffs.
The tariffs ramped up concerns over an escalating trade war between the world’s biggest economies, which could disrupt trade and bode poorly for global growth.
"Gold is already up more than 10% year-to-date, having hit a series of consecutive record highs along the way. Tariff concerns that risk higher inflation and slower economic growth are spurring demand for safe haven assets like gold," said analysts at ING, in a note.
Other precious metals also rose. Silver futures gained 0.1% to $32.468 an ounce, while platinum futures rose 1.3% to $1,034.40 an ounce.
Uncertainty hits industrial metals
Among industrial metals, benchmark copper futures on the London Metal Exchange were flat at $9,468.00 a ton, while March copper futures rose 2.4% to $4.7008 a pound.
"With Trump back in the White House, uncertainty and unpredictability are running high. Prolonged trade conflict would slow global growth and hurt demand for industrial metals," ING added.
"In 2018, the US president imposed a 10% duty on imported aluminium and a 25% tariff on imported steel to promote domestic metal production. The duties on Canada and Mexico were lifted a year later after a new free trade agreement between the two countries and the US."
Powell, US inflation in focus
Fed chair Jerome Powell is set to deliver semiannual monetary policy testimony to the House and Senate on Tuesday and Wednesday. The Fed chair's testimony is likely draw commentary and questions focused on the effects of potential tariffs on the U.S. economy.
Analysts and Federal Reserve officials have warned that Trump’s tariffs, which will be borne by US importers, could underpin inflation and give the Fed less impetus to cut interest rates.
To this end, U.S. consumer price index inflation data for January is due later this week, and is widely expected to factor into expectations for U.S. interest rates.
(Peter Nurse, Ambar Warrick contributed to this article.)