Gold price builds on its positive move beyond the $2,900 mark and hits a fresh record high during the Asian session on Tuesday as Trump's trade tariffs continue to boost demand for the safe-haven bullion. Bulls seem unaffected by expectations that the Fed would stick to its hawkish stance and a modest USD strength.
Risk aversion keeps fueling Gold demand, with the bright metal conquering the $2,900 threshold on Monday. Demand for safety was boosted by comments from United States (US) President Donald Trump, who pledged to impose more tariffs over the weekend.
Speaking to reporters on Air Force One, President Trump said on Sunday he would introduce new 25% tariffs on all steel and aluminium imports into the US while adding that he would soon announce reciprocal tariffs to all countries that levy US goods and services. XAU/USD extended gains towards $2,911.21 during American trading hours, hovering nearby at the time of writing.
Demand for safe-haven assets persists despite the positive tone of equities. The US Dollar (USD) trades with a firmer tone against its high-yielding rivals, while demand for Gold and the Japanese Yen (JPY) exceeds that of the Greenback. Meanwhile, Wall Street holds on to modest intraday gains, although caution prevails as investors await fresh Trump's headlines.
The focus this week will remain on the US. Federal Reserve (Fed) Chairman Jerome Powell will testify before Congress on Tuesday and Wednesday, with market players looking for fresh clues on the future of monetary policy. Additionally, the US will publish the January Consumer Price Index (CPI) on Wednesday, with the core annual reading foreseen at 3.1%, easing from the 3.2% posted in December.
Gold (XAU/USD) has broken above $2900/oz, fueled by safe-haven demand amid new tariff announcements.
The World Gold Council report indicates that geopolitical risks significantly contribute to gold's rise. Additionally, European ETF inflows have been substantial.
A sharp rise in US inflation could either push prices down or further increase safe-haven demand, creating a complex market situation.
Risk aversion continued at the start of another week following Donald Trump's pledge of blanket tariffs of 25% on steel and aluminum imports to the US. The markets opened with gaps as a result while safe haven flows continued to gain traction in the face of uncertainty.(Cay) Newsmaker23
Source: fxstreet
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