Sundaymail Editor
GOLD rose to a record high as investors flocked to safety after United States President Donald Trump reiterated threats to impose tariffs on Mexico and Canada.
Bullion rose as much as 0,2 percent to US$2 799,65 an ounce after prices jumped by 1,3 percent on Thursday, blowing past the previous all-time peak set in October.
The surge came after Trump said he would follow through on imposing 25 percent levies on imports from Canada and Mexico on February 1.
He also threatened China with tariffs, without specifying a level.
The precious metal, which is on track for its fifth consecutive weekly gain, has benefitted from haven demand as Trump’s tariff threats spur fears of trade wars that could sap economic growth.
There are also worries that his pledges to cut taxes and overhaul immigration may erode US finances and reignite inflation. Federal Reserve chairperson Jerome Powell said on Wednesday the US central bank was in a “wait-and-see” mode with regard to the potential impact of the new administration’s policies.
The Federal Open Market Committee this week left interest rates unchanged, as expected, after cutting them at each of the three previous meetings since September, and indicated that stalled progress towards lower inflation warranted a patient approach.
Elsewhere, traders focused on the Fed’s favoured inflation gauge, the personal consumption expenditures index, which was due later on Friday.
It was expected to show a small acceleration in price hikes, according to the median forecast of economists surveyed by Bloomberg. — Bloomberg
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