Gold prices surged to fresh all-time highs in early Asian trading on Monday, as renewed trade tensions triggered by United States President Donald Trump’s tariff threats against Europe boosted demand for safe-haven assets.
By 3:15 pm AEDT (4:15 am GMT), spot gold was up 1.4% at a record US$4,662.03 per ounce.
Trump announced a 10% tariff on goods from Denmark, Sweden, France, Germany, the Netherlands and Finland, as well as the United Kingdom and Norway, starting from 1 February.
The duties would remain in place unless the U.S. is allowed to buy Greenland, a move that stoked fears of European retaliation and supported traditional safe-haven assets such as gold.
European Union ambassadors on Sunday reached a broad agreement to intensify efforts to dissuade the Trump administration from imposing levies on European allies, while also preparing retaliatory measures should the tariffs proceed.
Countering some of gold’s upside, strong U.S. economic data have reduced expectations for near-term interest rate cuts by the Federal Reserve.
According to the CME Group FedWatch Tool, markets are pricing in a 95% of a rate hold at the Federal Reserve's next meeting on 28 January.
Improving labour market indicators have pushed Fed funds futures to price the next rate cut in June or September, compared with earlier expectations for January and April.
