Gold prices surged on Tuesday as investors sought safe-haven assets following U.S. President Donald Trump’s decision to impose new tariffs. By 07:08 ET (12:08 GMT), spot gold climbed 1.0% to $2,920.81 an ounce, marking a second consecutive session of gains. Gold futures also rose 1.1% to $2,931.49.
Investors turned to gold after Trump confirmed a 25% tariff on imports from Mexico and non-energy goods from Canada. Additionally, a 10% surcharge on Canadian energy and Chinese imports was introduced. These tariffs, which took effect at midnight on Tuesday, fueled concerns over global trade tensions.
China, Canada, and Mexico together account for over 40% of total U.S. imports. Economists worry that these levies could disrupt North American trade and increase costs for American consumers. Gold, often seen as a hedge against uncertainty, benefitted from these market fears.
So far this year, gold prices surged nearly 10%, even reaching an all-time high of $2,956.15 on February 24. However, analysts at UBS noted that profit-taking and concerns about gold bar availability in the U.S. and UK have caused some market fluctuations.
Meanwhile, Canada and Mexico are preparing countermeasures. Canadian Prime Minister Justin Trudeau announced a 25% duty on $20 billion of U.S. goods. If the U.S. tariffs remain for 21 days, Canada will introduce additional duties on $86 billion worth of American imports.
China has also retaliated, stating that it will increase tariffs on U.S. goods by 10%-15% starting March 10. The Chinese government labeled Trump’s decision as “unreasonable and groundless”.
With escalating trade conflicts, investors continue to flock to gold as a safe-haven asset. If tensions persist, analysts predict that gold prices could test new record highs in the coming weeks.
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Gold prices surge as investors react to Trump’s new tariffs. Trade tensions drive demand for safe-haven assets. Read the market analysis.
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