Gold prices reached an all-time high on Monday as investors sought refuge in the precious metal following U.S. President Donald Trump’s announcement of new tariffs on Canada, China, and Mexico. The tariffs have sparked concerns about inflation and a potential economic slowdown, driving demand for gold, which is traditionally considered a safe-haven asset during times of financial uncertainty.
Spot gold rose 0.7% to $2,821.62 per ounce by 11:22 a.m. ET, after touching a record $2,830.49 earlier in the session. U.S. gold futures also climbed, gaining 0.9% to $2,860.40. Despite a strong dollar, which usually pressures gold prices, investors are turning to the metal as a hedge against economic instability, according to David Meger, director of metals trading at High Ridge Futures.
The recent market movement follows Trump’s decision to impose a 25% tariff on Canadian and Mexican imports starting Tuesday, alongside a 10% tariff on Chinese goods. The move has heightened fears of a trade war that could slow global economic growth and drive inflation.
In response, Canada and Mexico announced retaliatory tariffs, while China vowed to challenge the U.S. tariffs at the World Trade Organization and take additional countermeasures. However, Trump later announced a temporary one-month pause on the tariffs targeting Mexico.
The uncertainty surrounding the potential trade war has investors closely watching gold’s trajectory. Bart Melek, head of commodity strategies at TD Securities, noted that the market has not yet seen a full reaction. “We haven’t seen a complete response from gold and if this trade war continues for a considerable period, it could lead to significantly higher gold prices down the road,” Melek said.
Gold has long been considered a safe-haven asset, as its value tends to rise during times of economic or geopolitical instability. When investors anticipate inflation, currency devaluation, or stock market volatility, they often turn to gold as a store of value. This has been evident in past financial crises, where gold prices surged as investors moved away from riskier assets.
Amid the ongoing uncertainty, J.P. Morgan analysts suggested that while short-term fluctuations in the equity markets could weigh on gold, the disruptive nature of tariffs presents a medium-term bullish outlook for the metal. Investors are also looking ahead to key economic data releases this week, including U.S. job openings, the ADP employment report, and the U.S. employment report, which could provide further insight into the health of the economy.
Other precious metals also saw price fluctuations. Spot silver gained 1% to $31.60 an ounce, while platinum dropped 1.4% to $964 per ounce. Palladium, however, climbed 0.6% to $1,013.75.
As trade tensions escalate and economic uncertainty looms, gold remains a focal point for investors looking to safeguard their wealth. The coming weeks will determine whether the metal continues its upward momentum or faces short-term market corrections.